Korean media: Samsung grabs TSMC's 7nm NVIDIA order

South Korean media reported that Samsung Electronics has snatched NVIDIA's next-generation 7-nanometer graphics processing unit (GPU) foundry order from TSMC because Samsung put profits aside in order to win customers and offered a more attractive price than TSMC.

South Korean business media Business Korea reported on the 10th, citing industry sources, that Nvidia will hand over the next-generation GPU code-named Ampere, which will be launched next year, to Samsung using the 7-nanometer extreme ultraviolet process. Ampere is Nvidia's first 7-nanometer GPU, and was originally expected to be manufactured by TSMC, but now Nvidia has decided to cooperate with Samsung. TSMC has never commented on customers and order status.

The report quoted industry insiders as saying that Nvidia's decision to cooperate with Samsung instead of its long-term partner TSMC is quite symbolic because this cooperation will make it easier for Samsung to win large customers in the future. GPU is Nvidia's flagship product, used in 5G mobile communications, AI and autonomous vehicles.

However, the Electronic Times, which first broke the news, pointed out that Nvidia chose Samsung because TSMC's 7nm production line has reached full capacity.

One of the reasons why Samsung Electronics was able to snatch Nvidia's next-generation GDP is that it focused on winning customers rather than making profits. The source said: "The semiconductor industry has always doubted the yield rate of Samsung's 7nm extreme ultraviolet process, but the offer Samsung provided to Nvidia is enough to make up for this."

Nvidia urgently needs a foundry that can produce 7nm chips at a low cost, one reason being that competitor AMD has already launched a 7nm GPU. More importantly, due to the recent decline in the cryptocurrency mining market, Nvidia, whose revenue last year depended on mining-related businesses, must cut costs. In addition, Samsung is also an attractive option for Nvidia, as it has previously used the 14nm process to produce Nvidia's GTX 1050 series, Tegra and Pascal architecture chips.

Industry observers are closely watching Samsung's order-grabbing strategy. Recently, Samsung's wafer business unit announced that it would provide special full-masks to some startups at a price 40% lower than TSMC. Samsung's full-mask set is cheaper than TSMC's multi-layer integrated mask (MLM), which can enable small-scale production to lower manufacturing costs. The mask is a thin film used to draw circuits on the wafer.