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Tech Giants Explore Samsung for 2nm Chips to Cut Costs and Diversify Supply

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by Bairon McAdams
January 8, 2025
Tech Giants Explore Samsung for 2nm Chips to Cut Costs and Diversify Supply

The semiconductor industry is witnessing a remarkable shift as tech giants like NVIDIA and Qualcomm change their strategies concerning the adoption of the 2nm semiconductor process. NVIDIA, a company traditionally rooted in a long-standing partnership with TSMC, has reportedly begun looking into Samsung Foundry as an alternative supplier. This move is driven largely by high costs and TSMC’s ability to set prices due to its near-monopolistic hold on the 2nm supply chain. Though TSMC remains the predominant 2nm provider, the competitive landscape is shifting as major clients explore new avenues to diversify and find more cost-effective solutions. NVIDIA’s potential shift to Samsung is particularly significant given the mixed performance Samsung has had with Qualcomm, yet this shows the industry’s increasing willingness to revise established supply chain dynamics.

A Dual-Source Strategy Emerges

Qualcomm has announced plans to implement a dual-source strategy for its 2nm process needs, splitting orders between TSMC and Samsung Foundry. This move highlights an industry trend of diversifying semiconductor sources to manage costs and reduce risks linked to relying on a single supplier. This strategy aims to increase flexibility and resilience in supply chains, which is critical in today’s world of semiconductor shortages and geopolitical tensions. While Apple plans to delay the integration of 2nm technology into its consumer products until 2026, other tech companies are eager to advance their transition despite potential performance uncertainties.

Samsung struggles to gain significant market approval for its 2nm process, yet manufacturers are willing to risk it to maintain a varied supplier base. If Samsung fails to meet industry standards, companies can still return to TSMC’s reliable offerings. This strategic shift by major tech firms aims to future-proof operations against supply chain disruptions and ensure competitive stability. The evolving semiconductor manufacturing landscape is marked by changing supplier-client relationships and a nuanced focus on cost and technological advancements. The future steps in the semiconductor sector will play a crucial role in shaping the technology landscape.

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