As Qualcomm unveiled the Snapdragon 8 Elite chipset earlier this week, Samsung, which has been working on its in-house Exynos 2500 to improve the 3nm yield, is said to abandon the plan and go Snapdragon 8 Elite only for the entire Galaxy S25 series. To turn the tide, it is reportedly embarking on the development of its next-gen Exynos chip, set to be featured in the Galaxy S27, according to Korean media outlet Sedaily and Wccftech.

The chip is expected to be manufactured with Samsung’s 2nm node, probably the SF2P process, which is an improved version of its first generation 2nm process, the reports note. Therefore, this would be a key battleground for Samsung, as it has been suffering from yield issues regarding 3nm node with GAA architecture for long.

And it does look like that Samsung aims high for the chipset, as the next-gen Exynos chip has been reportedly codenamed “Ulysses,” the Roman name for Odysseus, the hero from Greek mythology, according to Sedaily.

According to the reports, the SF2P process is slated for mass production in 2026, with enhancements in both performance and power efficiency. To be more specific, SF2P aims to improve performance by 12% while reducing power consumption by 25% and chip area by 8% compared to its predecessor.

It is also worth noting that Samsung’s foundry division is reportedly producing test chips and verifying the process design to refine the node.

Citing an industry expert, Sedaily notes that Samsung’s foundry has consistently relied on Exynos APs as a key customer. By refining its processes through managing substantial Exynos orders, Samsung has the potential to enhance its competitiveness against TSMC in next-generation chip manufacturing, although the challenge remains significant.

The challenges ahead for Samsung is formidable for sure. Foundry giant TSMC’s 2nm is expected to enter volume production in 2025, and it is already creating a buzz, as Chairman C.C. Wei said earlier that customer inquiries for 2nm are even higher than those for 3nm. According to previous market speculations, tech giants such as Apple, NVIDIA and AMD are believed to be the first batch of TSMC’s 2nm customers.

Another major rival, Intel, has shelved the 20A process node to focus entirely on the more advanced Intel 18A, aiming to enter mass production in 2025.

Japanese chip manufacturer Rapidus, on the other hand, plans to establish a fully automated production line using robots and AI in northern Japan to produce 2nm chips for advanced AI applications, with mass production anticipated as early as 2027.

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(Photo credit: Samsung)

Netherlands-based chip equipment maker ASML recently announced a reduction in orders for its 2025 forecast, leading to a sharp decline in its shares. The industry is concerned about ASML’s revenue from China.

According to Wccftech, ASML’s CEO Christophe Fouquet mentioned that China’s typical demand accounts for about 20% of ASML’s sales, and he expects that demand will eventually return to those levels in 2025.

He further stated that demand from China is primarily focused on legacy chips based on older-generation technology.

Notably,  Fouquet claims that China may be able to produce some chips at 5nm and 3nm nodes, albeit in limited capacity and using older DUV lithography technology, according to the report from Wccftech.

Whether China has the capability to produce chips at advanced nodes has recently come under scrutiny. Fouquet’s assertion follows reports that Xiaomi has purportedly completed the tape-out of its first 3nm SoC, which might be launched next year, according to the report from Wccftech. This reported innovation in China could assist Huawei’s HiSilicon and other sanctioned Chinese firms in improving their chip design

On the other hand, according to the report from Reuters, Fouquet believes that the U.S. export restrictions will persist regardless of who wins the presidential election.

According to the report from Reuters, Fouquet mentioned that the Netherlands and Europe are debating whether further export restrictions are for national security concerns or trade policy, and whether they would even be effective. He mentioned that even American companies are also thinking about whether these regulatory measures bring benefits or harm.

ASML’s revenue decline is not entirely influenced by China, as the downturn is also attributed to the underwhelming performance of ASML’s major clients, including tech giants Intel and Samsung, according to the report from Wccftech.

According to its press release, ASML revised its total net sales forecast for 2025 to a range of €30 billion to €35 billion, down from its previous estimate of up to €40 billion. Additionally, it reported third-quarter bookings of €2.6 billion, which fell short of the average analyst estimate.

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(Photo credit: ASML)

According to a report by China’s CCTV Finance on October 20, Samsung Electronics has recently begun restructuring its business, with the semiconductor division deciding to withdraw from the light-emitting diode (LED) business.

Samsung Electronics to Focus on Power Semiconductors

The report highlighted that Samsung Electronics’ exit from the LED business is primarily due to the group’s overall performance falling short of expectations.

According to Samsung Electronics’ preliminary unaudited financial results released on October 8 for the third quarter of 2024, both the company’s profit and revenue for the quarter fell below market expectations. Sales were 79 trillion KRW, a 17.2% year-on-year increase but lower than the market estimate of 81.57 trillion KRW. Operating profit was 9.1 trillion KRW, a 274.5% year-on-year increase but down 12.8% from the previous quarter, and also below analysts’ estimate of 11.5 trillion KRW.

Samsung entered the LED lighting business in 2012 by merging with Samsung LED. However, in recent years, the business has continued to struggle, gradually losing its competitive edge in the international market. Although the annual sales from this business reached approximately 10.4 billion RMB, Samsung believed that its contribution to the company’s overall sales was too small to ensure the desired profitability.

Therefore, Samsung decided to divest the LED business to focus more on core areas with better growth prospects, such as power semiconductors and Micro LED technology.

Power semiconductors are primarily used in electric vehicles, smartphones, energy storage, and home appliances. They are responsible for power conversion and current control, and are considered a crucial engine for accelerating industrial growth.

Samsung Expands Power Semiconductor Business

At the beginning of 2023, Samsung established a special task force for power semiconductors, and by the end of the year, it further reorganized its operations, transforming the LED division into the Power Semiconductor Division.

In July 2023, Samsung announced at its Foundry Forum that it would launch 8-inch gallium nitride (GaN) power semiconductor foundry services by 2025, targeting applications in consumer electronics, data centers, and automotive markets.

As part of this strategic plan, Samsung introduced German company Aixtron’s metal-organic chemical vapor deposition (MOCVD) system into its Giheung factory, which specializes in 8-inch wafer foundry, during the second quarter of this year.

Challenges Facing Samsung’s Semiconductor Business

Samsung’s semiconductor division, despite being one of its strongest sectors, is also facing increasing challenges.

In terms of wafer foundry, Samsung has long aimed to compete with TSMC. However, the two still show a noticeable gap in market share. According to the latest rankings from TrendForce in early September, TSMC held a dominant 62.3% market share in the second quarter, while Samsung, in second place, had a share of 11.5%.

Moreover, Samsung’s plans to build a wafer foundry in the U.S. have faced repeated delays. According to Reuters, Samsung has postponed the procurement of equipment for its Texas-based Taylor wafer plant due to difficulties in securing clients willing to collaborate.

The Taylor plant, with an investment of $17 billion, was originally intended to produce advanced chips for markets like artificial intelligence and smartphones, which require extreme ultraviolet (EUV) lithography equipment. Each standard EUV system costs approximately $150 million, and it is currently unclear how many units Samsung had originally planned to order from ASML. Both Samsung and ASML have declined to comment on the delayed equipment orders.

Earlier this year, media reports indicated that Samsung had delayed the mass production timeline for the Taylor plant from 2024 to 2026. However, without securing any cooperative clients, the plant’s prospects remain challenging, even with the delayed production schedule.

Some analysts suggest that if Samsung does not finalize orders for the necessary production equipment by early 2025, the production timeline could be further delayed, considering the time required from chip production to delivery.

Samsung Electronics plays a critical role in South Korea’s economy. As noted by China’s CCTV Finance, Samsung’s exports accounted for about 18% of South Korea’s total export volume last year. A decline in Samsung’s performance not only affects the competitiveness of South Korea’s semiconductor exports but also has a ripple effect on numerous upstream and downstream companies that collaborate with Samsung.

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(Photo credit: Samsung)

The global race to develop semiconductor industries is heating up, with countries like Singapore, Malaysia, Vietnam, and India making significant strides. Now, the Philippines is joining the fray with a new push to expand its presence in the sector.

According to a Bloomberg report, the Philippines is actively reaching out to Taiwanese semiconductor giants such as TSMC and United UMC in an effort to secure equipment and expertise needed to build its own chip fabrication operations.

Dan Lachica, head of the Semiconductor and Electronics Industries in the Philippines Foundation Inc. (SEIPI), explained that they are encouraging companies like TSMC and UMC to send their older, depreciated equipment to the Philippines. In return, Filipino workers would be trained to support these companies’ global operations.

The Philippines, home to more than 100 million people, lags behind its neighbors such as Malaysia and Singapore in the complex chip manufacturing industry, which requires billions of dollars in initial investment. Taiwan, led by TSMC, dominates the global semiconductor market, and its companies are expanding overseas to mitigate risks posed by tensions with China.

Neither TSMC nor UMC provided detailed responses to Bloomberg’s inquiries. TSMC declined to comment, while UMC reiterated its policy of not addressing market speculation.

The Philippines’ strategy is part of a broader effort to move beyond low-margin chip testing and packaging into more advanced areas such as IC design and semiconductor wafer fabrication.

Elsewhere in Southeast Asia, Vietnam has been increasing its focus on semiconductor development. Prime Minister Pham Minh signed Decision No. 1018/QD-TTg on September 21, as reported by the Vietnam Government News website. The decision outlines the country’s vision for semiconductor growth, with short-term goals set for 2030 and long-term projections extending to 2050.

India is also making strides in this field. During Prime Minister Narendra Modi’s visit to the U.S. in September, the two countries agreed to build a semiconductor plant focusing on infrared, gallium nitride, and silicon carbide chips, backed by India’s Semiconductor Mission and a strategic partnership with the U.S. Space Force.

(Photo credit: SEIPI)

SK hynix Inc announced today that it recorded 17.5731 trillion won in revenues, 7.03 trillion won in operating profit (with an operating margin of 40%), and 5.7534 trillion won in net profit (with a net margin of 33%) in the third quarter this year.

According to the third-quarter financial report released today by SK hynix, the company posted record-breaking figures, including revenues of 17.5731 trillion won, an operating profit of 7.03 trillion won (with an operating margin of 40%), and a net profit of 5.7534 trillion won (with a net margin of 33%) for the third quarter of this year.

SK hynix’s financial report shows that quarterly revenues hit an all-time high, exceeding the previous record of 16.4233 trillion won in the second quarter of this year by over 1 trillion won. Both operating profit and net profit also surpassed the records set during the semiconductor boom in the third quarter of 2018, which were 6.4724 trillion won and 4.6922 trillion won, respectively.

SK hynix emphasized that the demand for AI memory continued to be strong centered on data center customers, and the company marked its highest revenue since its foundation by expanding sales of premium products such as HBM and eSSD. In particular, HBM sales showed excellent growth, up more than 70% from the previous quarter and more than 330% from the same period last year.

As sales increased mainly on highly profitable premium products, the average selling price (ASP) of both DRAM and NAND rose in the mid 10% range compared to the previous quarter, which made the company mark the highest operating profit.

While the demand of memory for AI servers such as HBM and eSSD has grown noticeably this year, SK hynix predicts that this trend will continue next year. This is because generative AI is developing into a multi-modal1 form and global big tech companies continue to invest to develop artificial general intelligence (AGI).

SK hynix also forecasts that the PC and mobile product markets, which had been slow to recover demand compared to memory for AI servers, will be on a steady growth path as well next year as AI memories optimized for each device are released.

As a result, the company will continue to focus on profitability by increasing sales centered on high value-added products based on its world-leading technology in AI memory.

In the DRAM area, SK hynix is continuing the rapid transition from existing HBM3 to 8-layer HBM3E products. The company also plans to start supplying 12-layer HBM3E products, which were mass-produced last month, in the fourth quarter as scheduled. This makes HBM sales, which accounted for 30% of total DRAM revenues in the third quarter, expected to reach 40% in the fourth quarter.

For NAND, the company plans to expand sales of high-capacity eSSD, which is rapidly increasing market demand, while focusing on investment efficiency and production optimization.

“SK hynix has solidified its position as the world’s No.1 AI memory company by achieving the highest business performance ever in the third quarter of this year.” said Kim Woohyun, Vice President and Chief Financial Officer (CFO) at SK hynix. “We will continue to maximize profitability while securing stable revenues by taking flexible product and supply strategies in line with market demand.”

(Photo credit: SK hynix)