Author Yu-Jou Lin | Publication Date September 12, 2024 10:16 | Categories Samsung, Semiconductor, Wafer

Samsung Electronics dropped a bombshell yesterday (12th), reportedly cutting up to 30% of its overseas employees. At the same time, South Korean media Business Korea revealed that there are ongoing issues with the 2nm yield, leading Samsung Electronics to withdraw personnel from the Taylor factory, indicating another setback for their advanced wafer foundry business.

The initial plan for Samsung's Taylor factory in Texas was to be a production center for advanced processes of 4nm and below, with its favorable geographic location near major tech companies to attract American customers. However, despite rapid process development, Samsung still faces yield issues with 2nm, resulting in lower efficiency and production capacity compared to their main competitor, TSMC.

Currently, Samsung's wafer foundry yield is below 50%, especially for processes of 3nm and below, while TSMC's advanced process yield is around 60-70%. This gap has widened the market share difference between the two to 50.8 percentage points. Research firm TrendForce pointed out that TSMC's global wafer foundry market share in the second quarter was 62.3%, while Samsung was only at 11.5%.

Industry insiders have stated that Samsung's Gate-All-Around (GAA) yield is around 10-20%, unable to meet orders and production requirements. The low yield has forced Samsung to reconsider its strategy and withdraw personnel from the Taylor factory, leaving only a small number of employees.

Samsung Electronics had previously signed a preliminary agreement to receive up to 9 trillion Korean won in subsidies from the US chip act. However, the condition for receiving the funds is that the factory must operate smoothly, which is now at risk due to Samsung's current predicament.

Samsung's Chairman, Lee Jae-yong, personally visited major equipment suppliers such as ASML and Carl Zeiss in hopes of a breakthrough in process and yield improvements, but there have been no significant results, and it is uncertain when personnel will be redeployed to the Taylor factory.

Semiconductor scholars believe that the prevalence of internal bureaucracy, slow decision-making, and lower salaries within Samsung are the main reasons for the decline in their wafer foundry competitiveness. Compared to 20-30 years ago, the delay in investment schedules also shows that the management has not fully understood the current reality, so it is necessary to fundamentally reform the management system.

Samsung Electronics Withdraws Personnel from Taylor Plant Amid 2nm Yield Issues

（Picture source：Unsplash）