Samsung is making an important decision in the semiconductor industry. According to the latest reports from South Korea, Samsung Foundry is reducing capacity at its 4 nm, 5 nm and 7 nm chip production facilities due to low demand. So why was such a decision taken? Details are in our news…
Samsung Foundry temporarily shuts down 4nm, 5nm and 7nm manufacturing facilities due to low demand
According to the information received, the company plans to deactivate nearly 50% of these facilities by the end of 2024. Although it was initially announced that there would be a 30% capacity reduction in the facilities, further reductions are expected towards the end of the year. However, this is a temporary closure; The equipment in the facilities is in “off but not out of use” mode, meaning that they are not completely withdrawn from production while saving energy.
It is said that losing major customers such as Qualcomm and Nvidia had a significant impact on the decision. In the past, Qualcomm switched to TSMC due to performance problems experienced in chips such as Snapdragon 888 and Snapdragon 8 Gen 1.
Similarly, Nvidia started to prefer TSMC in its productions requiring high performance. After these losses, Samsung cannot catch the expected demand in 4 nm and 5 nm technologies. The company is trying to keep its production facilities functional by producing a limited number of chips such as the Exynos 2400, but this is not enough.
Advanced technology 3 nm and 2 nm production processes are not affected by this situation. Samsung has made progress in increasing production efficiency in 3 nm technology. On the other hand, an agreement has been reached with Japan-based Preferred Networks to develop artificial intelligence chips in the 2 nm process.
Judging by these developments, we see that Samsung is preparing promising projects for the future in 2 nm technology. There are also rumors that Qualcomm’s future Snapdragon 8 Gen 5 chip may also be produced by Samsung Foundry. Samsung has already started the development of 2 nm Exynos chips.
The company’s focus on advanced technology and production of more sophisticated chips to meet customer demands will show whether this strategy will be effective in the long term. In short, Samsung is repositioning itself to take firmer steps in the semiconductor world; Time will tell the results of this move.
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