“Failing to continue its recovery amid the ‘AI-driven semiconductor boom’ and instead ‘falling behind alone,’ South Korean memory chip giant Samsung has recently faced an unexpected downturn. Over the past three months, its stock price has dropped by one-third, reaching its lowest point since March 2023. There are even rumors in the industry that Samsung’s 3nm process yield rate is at 0, though Samsung has not released any such information.
According to a report from South Korea’s Asia Daily on the 13th, data released by the Korea Exchange shows that from September 3 to October 11, foreign investors sold Samsung Electronics stock for 23 consecutive trading days, with a total sell-off of 10.6593 trillion won (around 5.24 yuan per 1,000 won). During this period, Samsung Electronics’ stock price plummeted from 74,400 won to 59,300 won, a drop of 20.3%, reducing its market value from 444 trillion won to 354 trillion won.
The latest report also noted that Samsung Electronics’ third-quarter performance fell short of market expectations. On October 8, Samsung released its financial report for Q3 2023, showing sales of 79 trillion won, a 17.2% year-on-year increase, but operating profit dropped 12.8% from the previous quarter to 9.1 trillion won, missing the market forecast of 10.3 trillion won. This was due to weak demand for computer and mobile memory semiconductors. Meanwhile, rival SK Hynix threatens Samsung Electronics in the AI chip field. SK Hynix has already supplied fourth-generation high-bandwidth memory (HBM3) products to AI market customer Nvidia and is delivering HBM3E products, becoming the first in the industry to do so. In contrast, Samsung is still conducting quality tests on its related products.
A report from The Hankyoreh on the 10th suggested that Samsung Semiconductor’s lack of technical competitiveness is becoming apparent in its performance. First, because it lags behind competitors like SK Hynix in the development of core AI semiconductor components like high-bandwidth memory, its performance in this area has significantly declined.
At the same time, its supply to Nvidia is also delayed. Samsung had previously announced that ‘for fifth-generation high-bandwidth memory, commercial cooperation with key customers has been postponed.’ Additionally, since 2022, shrinking demand for memory chips in smartphones and personal computers, coupled with U.S. pressure on South Korea to limit chip exports to China, has caused Samsung’s profits to plummet by 97%, shaking its leadership in the DRAM market. In the wafer foundry field, Samsung has also struggled to overcome technical gaps and is facing tough competition. Experts indicate that the yield rate for its latest chips remains low, and as more products are produced, the deficit is expected to grow.
Regarding Samsung Electronics’ progress with 3nm chips, South Korean media DealSite reported in September that with the failure of Samsung’s mobile application processor ‘Exynos 2500’ in the Galaxy S25, doubts about the premature introduction of the 3nm process are growing.
‘Nanometer’ refers to the width of semiconductor circuit lines; the narrower the line width, the lower the power consumption and the faster the processing speed. Currently, the most advanced mass-production technology globally is 3nm. Samsung Electronics was the first in the industry to begin production of 3nm chips in June 2022, showcasing its foundry technology, but so far, it has not secured any significant customer companies. Industry insiders explain: ‘There has been a delay in the launch of sub-10nm products from Samsung’s foundry, and progress in improving the yield rate has been slow.’
The report stated that, generally, for a product to go into mass production, the yield rate must be over 60%. Although the yield rate of the ‘Exynos 2500’ improved to 20% in the second quarter of this year, it is still insufficient for mass production. Samsung Electronics plans to raise the yield rate to 60% by the second half of this year.
Market evaluations of Samsung Electronics remain pessimistic. Noh Geun-chang, head of research at Hyundai Securities, commented that while this may not be a ‘winter for semiconductors,’ it could be a ‘winter for Samsung Electronics.'”
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