A recent report from South Korean news outlet Chosung indicates that Samsung is set to close several of its older fabrication plants in the country. It is said that 30% of Samsung Foundry’s facilities for 4 nm, 5 nm, and 7 nm chips will become inactive, with this number expected to increase to 50% by the year's end. At present, Samsung's 4 nm node is responsible for producing a limited range of chips, including the Exynos 2400 and certain S-branded chips from Qualcomm.
Reasons for the Shutdown
The decline in demand is reportedly one of the key factors leading Samsung to temporarily halt operations at its manufacturing sites. Nevertheless, the equipment might remain in a powered-down state to cut electricity costs rather than being entirely shut down. The demand for Samsung's nodes has dropped significantly, particularly after the Snapdragon 888 and Snapdragon 8 Gen 1 did not perform well against competitors, prompting Qualcomm to consider TSMC for its advanced chips. Other companies, like Nvidia, have also made the switch to the Taiwanese manufacturer, leaving Samsung with very few clients.
Bright Future Ahead
Samsung's advanced 3 nm (and higher) nodes appear to be unaffected, as their outlook remains bright. Earlier reports indicated that Samsung's 3GAP technology faced challenges with low yields. However, the situation seems to be improving for Samsung's 2 nm technology. Notably, they have secured a deal with the Japanese firm Preferred Networks for AI chips. Additionally, Qualcomm may partner with Samsung Foundry to produce its Snapdragon 8 Gen 5 for Galaxy devices. Furthermore, Samsung has commenced work on a 2 nm Exynos chip.
Chosung (in Korean)
