'Semiconductor Fabless' AMD, Will It Entrust Samsung Electronics Instead of TSMC?

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] The global fabless semiconductor company AMD from the United States is drawing industry attention amid speculation that it will change its foundry (contract manufacturing) partner. While there are forecasts that AMD will switch its partner from Taiwan's TSMC, which has been experiencing production capacity shortages, to Samsung Electronics, there are also views that the actual production system will not be changed.

According to industry sources and foreign media on the 7th, AMD is reportedly considering outsourcing the production of some products such as Accelerated Processing Units (APU) and Graphics Processing Units (GPU), which have been entrusted to TSMC, to other foundry companies. This is because Apple has virtually monopolized TSMC's production lines, making it difficult to assign processes below 5 nanometers (1 nm = one billionth of a meter).

TSMC is producing the application processor (AP) for Apple's iPhone 12, released in the second half of last year, using the 5 nm process. Additionally, by securing orders for AP chips for the iPhone 13 and iPhone 14, Apple has reportedly reserved most of TSMC's 5 nm and 3 nm production lines. Globally, only TSMC and Samsung Electronics have foundry capabilities for processes below 7 nm. Ultimately, if TSMC's production capacity is exhausted, there is speculation that Samsung Electronics could take on the volume.

Nevertheless, there are also expectations that AMD will not entrust production to Samsung Electronics. On the 4th, Taiwan's DigiTimes cited sources saying that it is unlikely AMD will place 5 nm or 3 nm semiconductor orders with Samsung Electronics. The reason is that AMD's supply shortage is attributed not to TSMC's production shortage but to a shortage of the semiconductor core component 'Ajinomoto Build-up Film (ABF).' ABF is one of the components whose supply has not kept pace with the surge in semiconductor demand caused by COVID-19.

Moreover, even if AMD were to entrust foundry production to Samsung Electronics, it is pointed out that immediate production this year is impossible. Since Samsung Electronics and AMD have no prior foundry collaboration history, even if the two companies share schedules and start GPU design and development, it is expected to take at least about two years. If AMD entrusts production to Samsung Electronics, the actual products are expected to be produced using the 3 nm process in the latter half of 2022.

This content was produced with the assistance of AI translation services.