Samsung Foundry could go public amid low wafer yield issues

In recent years, Samsung Foundry, the company’s semiconductor production division, has been struggling to compete against TSMC, its main rival. The South Korean giant has even lost big clients due to problems with poor wafer yields. Now, a new report suggests that Samsung Foundry may go public as a public company in the United States in search of capital injection.

Samsung Foundry may look to raise capital by going public in the United States

According to South Korean media, Samsung Securities, a financial services unit, concluded in a report that Samsung Foundry will be listed as a public company. The main reason reportedly stems from ongoing issues during chip production. These issues have led Samsung Foundry to suffer significant losses as clients moved to TSMC in search of more reliable factories. In fact, Samsung Foundry is expected to report operating losses of 500 billion won (approximately $385 million) for Q3 2024.

Qualcomm is one of the main names that turned to TSMC after recent negative experiences with Samsung. The American company relied on Samsung’s factories to produce the Snapdragon 8 Gen 1, one of the most important chips in its history. The Snapdragon 8 Gen 1 even started a name change for the company’s SoCs, as it was the successor to the Snapdragon 888. Unfortunately, overheating and low efficiency issues inherited from Samsung’s wafers plagued the Snapdragon 8 Gen 1.

Then, Qualcomm moved the chip manufacturing to TSMC’s factories, now calling it Snapdragon 8+ Gen 1. The hardware basically used the same design as the Snapdragon 8 Gen 1, but with higher CPU frequencies. The result was one of Qualcomm’s most popular and widely used chips in history for its raw power and efficiency. Since then, Qualcomm and TSMC have worked together on all subsequent Snapdragon flagship chips. Samsung still makes some mid-range Snapdragons, though.

Samsung Foundry struggling to achieve decent yields

According to reports, Samsung’s 4nm wafer yield was 35%. That basically means that only 35 chips out of 100 were “usable.” Well, recent reports claim that Samsung’s 3nm wafer yield is somewhere between 10% and 20%. Samsung Foundry reportedly adopted Gate-All-Around (GAA) transistors for 3nm chip manufacturing earlier this year, but it is struggling to achieve high yield.

GAA is a technology that increases the performance and power efficiency of the chips produced. However, it seems that Samsung Foundry has not been up to the task. Samsung was one of the pioneers in this technology, and not even TSMC has implemented it. The Taiwanese company is said to start using GAA in 2025 for the production of 2 nm chips. Had it done things right, Samsung Foundry could have gained a competitive advantage.

The base Galaxy S25 would use Mediatek chips

Interestingly, in June, Qualcomm’s CEO opened the door to working with Samsung again. Should a deal materialize, the South Korean company would take on a portion of the Snapdragon 8 Gen 5 production. However, potential negotiations will probably depend on Samsung Foundry solving its current efficiency problems. If Samsung Foundry fails to resolve these issues, some models in the Galaxy S25 series may ditch Exynos chips. Samsung is reportedly considering using Mediatek’s Dimensity 9400 as the base SoC for the Galaxy S25 in most markets.