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Samsung’s Semiconductor Struggles Deepen: What’s Behind AMD’s Surprising Shift?
Samsung’s ambitious push into next-generation semiconductor manufacturing has hit another roadblock. The company’s foundry division, tasked with producing cutting-edge chips, is once again facing tough industry headwinds. Despite years of investment and aggressive pricing strategies aimed at top clients like AMD and Qualcomm, Samsung’s 4nm and 3nm chip production efforts are failing to gain critical traction. This comes at a time when competitors, particularly Taiwan’s TSMC, continue to dominate the high-performance semiconductor market.
Samsung’s Ongoing Chipmaking Woes
Samsung Foundry has been battling persistent issues surrounding its advanced chip manufacturing processes. The highly anticipated 3nm node, which was expected to elevate Samsung’s standing in the global foundry market, has underperformed — resulting in lost business opportunities from tech giants such as Qualcomm and NVIDIA. With trust shaken, Samsung has found itself on the losing end of billion-dollar contracts that could have reshaped its foundry fortunes.
More recently, the focus shifted to Samsung’s fourth-generation 4nm process node (SF4X), introduced earlier this year. Unlike older versions, SF4X includes advanced Back End of Line (BEOL) wiring technology, which is designed to enhance chip performance while cutting production costs. It was expected that AMD would partner with Samsung to manufacture server CPU I/O dies on this node, especially as TSMC reportedly lacked sufficient 4nm capacity at the time.
This partnership would have been a critical win for Samsung. The company has aggressively priced its foundry services to lure clients away from TSMC, and AMD’s nod of approval would have boosted credibility across the semiconductor industry. However, in an unexpected twist, AMD is now reportedly walking away from the deal.
The reasons remain unclear. Some speculate AMD might have finally secured the needed production capacity from TSMC, while others believe this could be a strategic negotiation tactic to push Samsung toward offering even better terms. Regardless, the implications for Samsung are troubling. The company has also been forced to shut down several legacy process lines due to falling demand, highlighting broader challenges in its semiconductor business.
This latest development adds to a growing narrative: Samsung’s foundry division is falling behind its competition at a time when demand for advanced chips is booming globally.
What Undercode Say:
Samsung’s foundry business continues to struggle against industry expectations, and this latest news involving AMD reflects deeper structural issues within its semiconductor operations. The promise of advanced node competitiveness — especially in the 3nm and 4nm ranges — has not materialized into sustainable business wins.
There are several layers to unpack here. First, Samsung’s production yields and process maturity are not matching the standards set by TSMC, whose consistency and reliability have kept it as the go-to supplier for tech giants. While Samsung is known for undercutting prices, that alone isn’t enough. Chip customers like AMD need assurance in both performance and supply stability. The fact that AMD initially considered Samsung shows there was interest, but their sudden withdrawal signals doubts about Samsung’s capabilities or reliability.
Samsung’s introduction of BEOL in its SF4X process was seen as a major technical step forward, but even with this improvement, confidence seems shaky. If AMD had moved forward, Samsung could have used the deal to showcase its technical progress and secure more clients. Now, it’s back to square one.
Moreover, the foundry’s future is also being shaped by geopolitical tensions, supply chain disruptions, and the capital-heavy nature of chip manufacturing. Samsung, though financially robust, is clearly feeling the pressure from multiple fronts. The closure of legacy production lines further demonstrates that both new and old parts of its business are under strain.
Another factor worth considering is the trust element. AMD and others may perceive Samsung’s foundry as a risky bet compared to TSMC’s proven track record. Even if Samsung offers competitive pricing, the uncertainty surrounding process maturity and delivery timelines is a major red flag for companies operating in a market where delays can cost millions.
There’s also the possibility that AMD is leveraging this as a strategic move. Backing out publicly may force Samsung to revisit pricing or offer technical guarantees. Whether that tactic works remains to be seen, but for now, the public perception is that Samsung has once again lost out on a major opportunity.
Looking ahead, unless Samsung can achieve a breakthrough with its 2nm or refined 3nm processes — both in yield and reliability — it risks losing relevance in the premium foundry space. Its consumer electronics success won’t be enough to carry the entire brand, especially as the chip market becomes increasingly vital in global tech leadership.
In the end, Samsung must do more than just innovate. It needs to deliver consistently, communicate transparently, and rebuild trust across the semiconductor ecosystem.
Fact Checker Results ✅
🔍 AMD has not officially confirmed the termination of the SF4X collaboration with Samsung
🔍 TSMC still holds the dominant market share in advanced node manufacturing
🔍 Samsung has indeed halted some legacy production lines due to low demand
Prediction 📈
If Samsung cannot secure a marquee client like AMD or NVIDIA soon, its foundry division will continue losing ground to TSMC. The company’s next big test will be with its 2nm roadmap — and if it underdelivers again, we may see Samsung shift focus away from advanced foundry services and lean harder into consumer electronics and memory markets instead.
References:
Reported By: www.sammobile.com
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