Samsung's yield rate in the advanced process semiconductor foundry business has been caught in the fraud scandal
Author | Yao Yongzhe
Edit | Bao Yonggang
According to South Korean media INFOSTOCK DAILY, Samsung's yield rate in the advanced process semiconductor foundry business fell into a full-blown fraud scandal, according to the media report, Samsung executives may have fabricated the yield of their chip below 5nm process during the trial production stage to boost the competitiveness of Samsung's foundry business.
Prior to this, it was reported that Qualcomm, the largest customer of Samsung Semiconductor FOUNDC services, is expected to be completed exclusively by TSMC next year for the upcoming 3nm process, and earlier, Samsung has failed in the competition with TSMC and lost the order for NVIDIA's 7nm process GPU.
NVIDIA and Qualcomm are Samsung's two largest foundry customers, and losing the favor of the two largest customers marks that Samsung is already at an overall disadvantage in the competition with TSMC.
The chip yield was rumored to be fake, and Samsung opened an investigation into the foundry department
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Samsung has recently launched an investigation into the whereabouts of a large number of funds that were originally planned to expand production capacity and guarantee yields. The investigation was launched because Samsung Electronics suspected fraud in previous reports on the production and yield of Samsung Semiconductor FOUNDRies.
According to reports, Samsung Electronics' DS division is undergoing an inspection by the management on whether the yield report of the 5nm chip process is true. In the next step, the management department will also check the chip yield report of the 4nm and 3nm process processes.
At present, the competition between Samsung and TSMC in advanced processes is in a white-hot stage. Last year, Samsung won an exclusive order for the Qualcomm device processor Snapdragon 8 Gen1, and also plans to achieve mass production of 3nm process chips before TSMC in 2022. But now, Samsung may be about to lose Qualcomm' big customer.
In addition to handing over all of its orders to Samsung next year, Qualcomm also announced that it will hand over a part of the follow-up orders for the Snapdragon 8Gen1, a 4nm process chip that has been commissioned to Samsung this year, to be produced by TSMC. Qualcomm said that the reason for this is because the current process yield of Samsung is difficult to meet Qualcomm's requirements.
According to industry sources, the yield of snapdragon 4nm process chips produced by Samsung is only 35%. And Samsung's self-developed 4nm process SoC Orion 2200 has a lower yield. This means that nearly 70% of the chips produced by Samsung are waste chips, which not only makes the cost of chips high. Flaws in its process have also led to problems in power consumption and performance of Snapdragon's chips.
Qualcomm and Samsung's decade of "love and kill"
In 2020, Qualcomm announced that it will entrust all orders for 5nm processors to Samsung OEM. At that time, Qualcomm was in the period of "overlooking the mountains and small mountains", and was the undisputed "big brother" in the non-Apple camp of the mobile terminal market. In 2020, MediaTek launched a high-end product, the Tianji 1000 series, the market performance was cold, in contrast, Qualcomm's flagship chip Snapdragon 865 was highly sought after.
In fact, qualcomm and TSMC and Samsung have had a cooperative relationship before. Qualcomm's flagship processors such as Snapdragon 820, Snapdragon 821, Snapdragon 835, Snapdragon 845 and other processors are all produced by Samsung, while snapdragon 855 and Snapdragon 865 series are produced by TSMC. Among the chips produced by these two foundries, there are explosions that have double harvests in word-of-mouth sales in that year, and there are also unsatisfactory situations. One of the important reasons why Qualcomm announced in 2020 that it will hand over all the next-generation chips to Samsung production is Qualcomm's dissatisfaction with TSMC's "Apple first" policy.
The biggest customer of TSMC's foundry business is Apple, and as early as 2016, TSMC became a foundry of Apple's A-series chips. Since then, TSMC and Apple have maintained a state of "symbiosis": TSMC provides Apple with stable chip production capacity and yield, and Apple provides A steady stream of orders for TSMC.
Because the business of OEM for Apple is more important to TSMC in terms of profits and company strategy, TSMC has been pursuing an "Apple first" capacity allocation scheme for many years. However, in recent years, due to the impact of the new crown epidemic, the global supply chain has been blocked and triggered a wave of core shortages. While continuing to pursue the "Apple first" policy, TSMC is also concentrating on solving the OEM problem of Apple's self-developed Arm architecture chip M1, which makes the already insufficient production capacity more stretched.
In the end, this led to a long-term shortage of Snapdragon chip production capacity, which caused Qualcomm's dissatisfaction.
At that time, Qualcomm believed that Samsung could provide lower-priced and higher-priority foundry services, so Qualcomm and Samsung stood together. But what happened next may have exceeded Qualcomm's expectations.
The market performance of the Snapdragon 888 chip manufactured by Samsung did not meet expectations, making Qualcomm's 2021 not smooth, and the power consumption problem caused by Samsung's process defects even became a hot topic for a time, and the Snapdragon 888 chip was also dubbed the "Fire Dragon Chip" because of its poor heat performance.
After the Snapdragon 888 "overturned", Snapdragon did not immediately abandon Samsung, but chose to believe in Samsung's ability to improve its craftsmanship. Qualcomm's new generation of devices, the SoC Snapdragon 8 Gen1, is still used in the production of foundry services from Samsung.
But Samsung's performance has once again disappointed Qualcomm: the Snapdragon 8 Gen1 still has not solved the power consumption problem that has been questioned in the previous generation process, and due to the low yield of Samsung's foundry, according to industry estimates, the cost price of a Snapdragon 8 Gen1 chip has approached a thousand yuan.
At the same time, Qualcomm's old rival MediaTek has the intention of launching a general attack on Qualcomm this year, MediaTek released the flagship processor Tianji 9000 after Qualcomm released the Snapdragon 8 Gen1 processor this year, and announced that it will use TSMC 4nm process OEM. Due to the long-term dissatisfaction of consumers with the fever problem caused by Samsung OEM, coupled with the huge improvement of Tianji 9000 compared with the previous generation, many consumers who were once loyal followers of Qualcomm have been holding coins to watch MediaTek's performance this year. This made Qualcomm face great pressure and challenges, and finally made the decision to abandon Samsung and turn to the arms of TSMC.
Intel "accelerated the sprint", whether Samsung can break through the encirclement
In recent years, competition in the chip foundry industry has become more and more intense. Not only is the "war" between Samsung and TSMC from the old rivals who competed for the OEM rights of Apple's A-series processors in 2010 to the decisive stage, but more and more "newcomers" have also chosen to step on the accelerator on this track.
Since the new CEO Pat took office, Intel has vigorously developed its foundry business IFS around its IDM 2.0 blueprint. At the Intel Investor Conference on February 18, Pat confidently introduced the company's future development blueprint in the foundry industry to Intel investors. According to the plan, Intel will go through five process nodes in the next four years, realizing the Intel4 process as early as 2022 and mass production of Amy-class chips as early as 2024. If this blueprint comes true, it will mark Intel's complete removal from TSMC's elbow in the next few years, and will start an all-out war with TSMC in the foundry business of advanced processes.
At the same time, the domestic chip foundry industry has also flourished in the past two years. SMIC,100, a leading domestic chip foundry company, recently released its 2021 financial report showing that SMIC's sales and revenue data have reached a record high. At the same time, SMIC already has the ability to produce 14nm chips and is moving towards more advanced processes. Although domestic chip foundries do not yet have the ability to compete with established manufacturers such as Samsung and TSMC in advanced process technology, as a late-stage star, it is still unknown whether it is possible to bring changes to this market pattern in the future.
Cui Yangou, advisor to the Hyundai Research Institute, said, "TSMC is working hard to ensure the yield of the 4nm/3nm semiconductor manufacturing process. Samsung Electronics is in the midst of fierce competition and uncertainty is high. ”
In the past decade, Samsung has successively lost the favor of Apple, Nvidia, Qualcomm, which are important customers in the chip industry. In the face of the industry's increasingly "rolled" status quo, Samsung has been attacked by the belly, and now it is even more involved in the "counterfeiting" scandal. Samsung needs to make changes faster, otherwise the market will leave Samsung with little time and trust.