Samsung Electronics emerged as a strong beneficiary as AMD, the world’s three largest fabless (semiconductor design company) and competing for the PC central processing unit (CPU) market with Intel, is considering diversifying semiconductor foundries (consignment production).
In fact, only Samsung Electronics and TSMC in Taiwan can produce advanced semiconductors, and Apple has monopolized TSMC’s advanced semiconductor production lines. The semiconductor industry predicts that AMD’s option will eventually be’diversification, Samsung Electronics’.
Comprehensive analysis of major foreign media and industry, AMD is internally considering diversification of consignment manufacturers for some products, such as graphics processing units (GPU). All state-of-the-art semiconductor products below 5 nanometers (nm·1 nm are 1 billionth of a meter) are subject to review.
Currently, AMD has entrusted the production of the `Zen 4` architecture (semiconductor basic design)-based CPU and `RDNA3` architecture-based GPU to the TSMC 5nm process line. An official in the semiconductor industry explained, “It is said that it is diversified, but since Samsung Electronics and TSMC are the only companies that can make semiconductors below 5 nanometers, AMD can give a considerable amount to Samsung Electronics.”
AMD’s concern is due to the Apple’black hole’. Apple outsources mobile application processor (AP) and notebook PC CPUs from TSMC, and is the largest customer of TSMC and monopolizes advanced processes below 5 nanometers. Information Network, a US semiconductor market research firm, estimated that Apple accounts for 21-23% of TSMC sales.
However, the semiconductor industry reports that Apple accounts for 50% and up to 80% in the 5-nano process.
This year, Apple plans to further increase TSMC outsourcing. Rumors have emerged that AMD has been subordinated to Apple in TSMC’s production allocation negotiation.
Samsung Electronics, which overtakes TSMC and dreams of becoming the world’s No. 1 system semiconductor by 2030, is an excellent opportunity to attract large-scale customers, AMD. As of the beginning of this year, the Samsung Electronics Foundry Division has Samsung Electronics’ wireless division (mobile AP), Qualcomm (mobile AP), and NVIDIA (GPU) as major customers in the 8-5 nano process. If AMD entrusts the foundry to Samsung Electronics, Samsung Electronics will use three of the world’s top five fabless (Qualcomm, Broadcom, Nvidia, Mediatech, and AMD) as customers.
However, even if AMD entrusts the foundry to Samsung Electronics, it cannot be produced immediately. Samsung Electronics and AMD have no history of foundry collaboration. This means that there is no previous AMD product blueprint for Samsung Electronics to refer to. Even if the two companies share a schedule and start designing and developing GPUs, it will take at least two years.
If the alliance between Samsung Electronics and AMD is concluded this year, the actual product is expected to be produced using a 3-nano process in late 2022.
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