EUV is not available! Samsung's 5nm production plan is completely messed up

South Korean financial media Business Korea reported that ASML is the world's only manufacturer of extreme ultraviolet (EUV) exposure equipment used in semiconductor production. However, due to the COVID-19 pandemic, the Dutch manufacturer has difficulty exporting its equipment, which has had a negative impact on global semiconductor giants such as Samsung Electronics and TSMC. Some experts say that Samsung Electronics will suffer greater damage than TSMC.

The report said that ASML's delayed delivery of equipment is forcing the two foundry giants to change their development and production roadmaps. TSMC is considering delaying the trial production of 3-nanometer chips from June to October; Samsung Electronics is scheduled to start mass production of 5-nanometer semiconductors this year, but delays seem inevitable.

Business Korea pointed out that this situation is more painful for Samsung than TSMC. TSMC plans to produce 5-nanometer chips for Apple, Qualcomm, Huawei and AMD in the second quarter of this year. TSMC is one step ahead of Samsung, which has not yet proposed a detailed timetable for mass production of 5-nanometer products.

Last year, Taiwan companies led by TSMC swept up ASML's EUV equipment, accounting for 51% of the Dutch company's total sales, while Korean companies accounted for only 16%. Although Samsung purchased EUV equipment including those for DRAM production last year, compared with TSMC, the company's purchase of EUV equipment for its wafer business is not enough.

The report said that Samsung Electronics is confident that it will take the leading position in this system semiconductor market by 2030, but the problem is that the gap between the company and TSMC in the foundry market is widening. According to previous data from market research firm TrendForce, TSMC's market share in the foundry market in the first quarter of 2020 increased by 1.4 percentage points from the previous quarter to 54.1%, while Samsung Electronics' market share fell by 1.9 percentage points to 15.9%.

The EUV process technology foundry market is a competition between Samsung Electronics and TSMC. If Samsung Electronics fails to take the lead in technology, the market share gap with TSMC will inevitably widen.

Samsung Electronics was the first company to introduce EUV in the foundry process, but failed to secure technological advantages in the micro-manufacturing process. If Samsung Electronics lags behind TSMC in the micro-manufacturing competition, it will be almost impossible to obtain semiconductor orders from major IT industry companies such as Apple and Qualcomm.

Samsung Electronics Vice Chairman Kim Ki-nam said at the March shareholders' meeting: "There is a gap between Samsung Electronics and TSMC in the foundry business, but we will develop our foundry business by taking the lead in new processes." However, if the introduction of EUV equipment is delayed, the company will not be able to take the lead in new processes.