[News] Samsung’s Next Move? Early HBM4 Mass-production and 2nm Foundry Solutions Could Be the Cure

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After reporting disappointing third-quarter earnings forecast, Samsung’s next move has become the center of market attention. According to a report by Business Korea, to turn the situation around, Samsung may shift its strategy focus to early HBM4 mass production, as well as targeting advanced foundry solutions below 2nm.

A couple of days ago, Samsung warned its third-quarter profit would probably reach 9.1 trillion won, falling short of market expectations. Jeon Young-hyun, the head of Samsung’s Device Solutions (DS) division, issued an unusual public apology in the meantime.

Citing industry sources, Business Korea notes that Samsung’s DS division is expected to post an operating profit of around 5 trillion won (about USD 3.8 billion) for the third quarter, which is reportedly below the market expectation of 6 trillion won. The figure is significantly lower than SK hynix’s projected quarterly operating profit, which is expected to be in the high 6 trillion won range, according to the report.

Samsung May Accelerate HBM4 Progress to Turn the Tide

The series of setbacks have prompted the struggling giant to take action. As Samsung’s lackluster performance could be attributed to its delay in supplying NVIDIA with its 12-layer HBM3e product, industry insiders cited by Business Korea suggest that accelerating the mass production of HBM4, as well as introducing 2nm foundry solutions, could just be the remedies Samsung needs.

In terms of the HBM market, in which Samsung is lagging behind SK hynix on HBM3e verification, the report indicates that Samsung is expected to prioritize the early mass production of HBM4, which is projected to become mainstream in 2025.

A source familiar with the situation told Business Korea that HBM orders from companies other than NVIDIA would rise next year. Major tech firms, including AMD, Amazon, Microsoft, Google, and Qualcomm, are also working on AI semiconductors. Therefore, it does not necessarily mean that Samsung should concentrate solely on NVIDIA, and it could accelerate supply contracts with NVIDIA’s competitors, the report notes.

TrendForce’s latest findings indicate that Samsung, SK hynix, and Micron have all submitted their first HBM3e 12-Hi samples in the first half and third quarter of 2024, respectively, and are currently undergoing validation. SK hynix and Micron are making faster progress and are expected to complete validation by the end of this year.

2nm Advancements Would be Another Focus

On the other hand, in terms of the foundry sector, the report suggests that Samsung is expected to further enhance its ‘turnkey order’ strategy. This approach addresses concerns about technology leakage while providing HBM as part of a comprehensive package.

According to the report, Samsung is set to begin mass production of its GAA 2nm process in 2025. The company also aims to complete the development of the 2nm process with Backside Power Delivery Network (BSPDN) technology by 2027. Having secured 2nm orders from Japan’s AI unicorn Preferred Networks (PFN) and U.S. AI semiconductor company Ambarella, Samsung reportedly plans to seek collaboration with major tech firms.

To attract customers, Samsung will host the “Foundry Forum 2024” online on October 24. Previously scheduled to be held in Beijing, the event will now be conducted virtually, which aligns with the company’s efforts to reduce costs. Will it make further progress in advanced nodes? The whole world is watching.

Read more

• [News] Lagging behind SK hynix in HBM, Samsung Plans Significant Year-end Cuts to Chip Executives
• [News] Samsung Foundry Faces Yield Struggles and Client Losses, External Push for Spinoff and U.S. Listing

(Photo credit: Samsung)