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Samsung secures AMD chip orders with 4nm process technology

Updated on Jun 26,2024

Samsung secures AMD chip orders with 4nm process technology

Table of Contents

  1. Introduction
  2. Memory Chip Exports in South Korea
    • 2.1. Overview of Memory Chip Exports
    • 2.2. Increase in Multi-Chip Package (MCP) Memory Chip Exports
    • 2.3. DRAM Exports Narrowing the Decline
  3. Impact of the Pandemic on Memory Chip Manufacturers
    • 3.1. Kioxia's Operating Loss and Falling Demand
    • 3.2. Negotiations between Kioxia and Western Digital
    • 3.3. SK Hynix's Limited Investments and Future Plans
  4. South Korea's Logic Chip Industry
    • 4.1. Samsung's Improvements in 4nm Process Technology
    • 4.2. Samsung's Chance to Secure AMD Chip Orders
    • 4.3. The Potential for Samsung in the Server Chip Market
  5. Conclusion

Introduction

The Korean Ministry of Trade recently released data on memory chip exports in South Korea, showcasing both challenges and opportunities for the industry. This article explores the current state of memory chip exports, the impact of the pandemic on memory chip manufacturers, and the development of South Korea's logic chip industry.

Memory Chip Exports in South Korea

2.1 Overview of Memory Chip Exports

According to the data, memory chip exports faced a decline in September but showed signs of recovery in October, marking the first year-on-year increase in 16 months. Semiconductors, being the backbone of South Korea's economic exports, play a crucial role in the country's growth prospects.

2.2 Increase in Multi-Chip Package (MCP) Memory Chip Exports

Exports of multi-chip package (MCP) memory chips saw a significant increase of 12.2% year-on-year. This category, known to be the most profitable, contributed to the overall rebound in chip exports.

2.3 DRAM Exports Narrowing the Decline

The dynamic random access memory (DRAM) category, one of the most crucial segments, experienced a narrow decline of 8.1% in October, marking the first time in over a year that the decline stayed in the single digits. This signals a positive trend for DRAM exports in the future.

Impact of the Pandemic on Memory Chip Manufacturers

3.1 Kioxia's Operating Loss and Falling Demand

Japanese storage manufacturer Kioxia reported an operating loss of 100.8 billion yen due to a decrease in demand for memory chips used in smartphones and personal computers. The company faced the challenges of falling demand, oversupply, and industry consolidation caused by the pandemic.

3.2 Negotiations between Kioxia and Western Digital

Kioxia has been negotiating a merger with Western Digital, but negotiations reached an impasse, and the deal was put on hold. To address oversupply issues, Western Digital announced a spinoff of its pop-up business and secured new financing for part of its debt.

3.3 SK Hynix's Limited Investments and Future Plans

During its third-quarter results conference call, SK Hynix expressed cautiousness regarding future investments due to the slow recovery of forward demand. The company plans to prioritize investments in the high-bandwidth memory (HBM) field, specifically focusing on next-generation HBM3e DRAM expansion and through-silicon electrode TSV for stacking. However, the company remains optimistic about the long-term potential, expecting high-frequency memory HBM shipments to reach 100 million units per year by 2030.

South Korea's Logic Chip Industry

4.1 Samsung's Improvements in 4nm Process Technology

Samsung's wafer foundry business, known for its 4nm process technology, had been lagging behind TSMC in terms of chip performance and yield. However, recent reports indicate that Samsung's 4nm process technology has significantly improved, with a yield rate exceeding 70%. This improvement presents an opportunity for Samsung to regain its position and attract major customers.

4.2 Samsung's Chance to Secure AMD Chip Orders

Samsung has the potential to secure AMD chip orders as the next-generation chips using Zen 5c architecture are planned to be manufactured using Samsung's 4nm process. The combination of Samsung's improved technology and TSMC's advanced 3nm process offers diverse supply options for AMD, thereby attracting considerations for Samsung's 3nm GAA process in the future.

4.3 The Potential for Samsung in the Server Chip Market

Securing AMD's 4nm chip orders would lay the foundation for Samsung to enter the large crystal server market in the future. Although TSMC has been the preferred foundry for chip manufacturers, the surge in demand for AI chips has stretched TSMC's production capacity. Samsung's improved processes and competitive prices make it an attractive alternative for customers to diversify their outsourced production orders.

Conclusion

The memory chip industry in South Korea is showing signs of recovery, with memory chip exports experiencing a year-on-year increase. However, challenges remain, and memory chip manufacturers are navigating the effects of the pandemic and intensifying competition. Samsung's advancements in 4nm process technology and the potential to secure AMD chip orders provide opportunities for growth in the logic chip industry. As the industry continues to evolve, diversification and strategic investments will be crucial for sustained success.

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