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    Samsung hopes better 3nm yields can stop another historic profit decline

    Business
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    Last updated: May 1st, 2023 at 09:12 UTC+02:00

    Samsung is in tough competition with TSMC for chip manufacturing orders on the advanced 3nm process. Its the company's first semiconductor foundry node that utilizes the GAA-FET technology. Samsung had previously been relying on FinFET-based nodes for over a decade.

    The company said during an earnings call that its wafer yields are in the range of 60-70% during the development phases of the nodes. It seeks to inspire customers' confidence in the technology. Samsung will certainly be hoping that this can lead to a reversal in fortunes and prevent another historic profit decline.

    Samsung would like to steal some of TSMC's customers

    It's impressive if Samsung's 3nm wafer yields have reached 60-70% during the development phase as the company struggled with this during the development of its 4nm process. That was one of the reasons why Qualcomm shifted orders from Samsung to TSMC for the Snapdragon 8 Gen 1 and Gen 2.

    These higher yields will inspire confidence in customers who may then choose to have their 3nm chips made at Samsung's foundry. The company has reportedly sent 3nm GAA prototypes to some customers to demonstrate the quality. With TSMC's current 3nm production capacity not being able to fulfill demand, Samsung will be hoping to win over some of those customers.

    Contract chip manufacturing is crucial to Samsung's financial success. The company's semiconductor division has been having a horrible time lately, losing $3.41 billion and leading to a historic 95% drop in profit for Q1 2023, Samsung's lowest profit in 14 years. That's largely due to a decline in demand and lower average selling prices for memory chips and other semiconductors.

    Samsung will be looking to offset some of those losses by ramping up production of 3nm chips. It may still take some time before it's able to do that with its 3nm node.

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