Samsung could get to make some of AMD's advanced chips for the first time

Earlier this week, AMD signed a contract to use Samsung’s sixth-generation high-bandwidth memory (HBM4) chips in its next flagship AI accelerator system. Now, it is being reported that Samsung is using HBM4 as a bargaining chip to secure some contract chip manufacturing work from AMD.

According to a report from Chosun Biz (via Jukan), AMD CEO Lisa Su met Jeon Young-hyun, Head of Samsung Electronics’ DS Division (Vice Chairman), to discuss the details of the new agreement between the two companies. The report claims that the deal includes a condition under which Samsung will manufacture a portion of AMD’s chips in exchange for increasing the supply of HBM4 chips.

While AMD and Samsung have been partners for years, their collaboration has primarily focused on memory chips such as GDDR and HBM. In the recent past, Samsung also partnered with AMD to develop in-house GPUs for its Exynos chips. AMD has traditionally relied on TSMC for contract chip manufacturing and has used GlobalFoundries as a backup for less critical chips. It has never used Samsung Foundry for manufacturing its logic chips.

Now that securing HBM chips is more important than ever to compete with companies like Nvidia and Broadcom, AMD may have to agree to shift some of its chip fabrication to Samsung Foundry. Samsung appears to have the upper hand. The South Korean firm does not face a shortage of clients willing to pay premium prices for DRAM and HBM, and it is leveraging that position to win foundry business from AMD.

After facing significant setbacks with its 3nm process node last year, Samsung’s foundry business saw a turnaround when it secured a $16.5 billion 2nm chip manufacturing contract from Tesla. Following that, Samsung introduced its first 2nm chip, the Exynos 2600, as a proof of concept. These developments have helped improve client confidence in Samsung’s 2nm technology.

Some reports claim that Qualcomm will have at least one flagship Snapdragon chip manufactured on Samsung Foundry’s 2nm node later this year. Currently, Samsung Foundry is also producing 4nm Groq 3 LPU chips for Nvidia. Overall, Samsung Foundry appears to be regaining momentum.