Samsung's chip biz eyes rebound with new processes

Samsung Electronics' chip plant in Pyeongtaek, Gyeonggi Province / Korea Times photo by Ha Sang-yun

Samsung Electronics’ chip-making Device Solutions (DS) Division is set to adopt finer manufacturing processes that enable faster and more powerful computing, aiming to secure orders from global big tech firms, raising expectations for a rebound from its prolonged earnings slump.

According to industry officials Wednesday, Samsung Electronics Vice Chairman and DS Division head Jun Young-hyun visited the United States last week and met with his counterparts at global big tech firms, including Nvidia.

Details of his meetings remain unknown, but he reportedly discussed Samsung’s potential supply of high-bandwidth memory (HBM) for artificial intelligence (AI) processors and the company’s foundry capabilities.

The meeting came amid the company’s recent production readiness approval for DRAMs manufactured through 10-nanometer class 1c process. Approval is granted for products ready for mass production.

The 1c process refers to the sixth-generation manufacturing process within the 10-nanometer class, which is divided into six stages — 1x, 1y, 1z, 1a, 1b and 1c. The progress reflects finer node dimensions which result in more computing power and higher energy efficiency. The 1c process represents approximately 11 nanometers.

Reportedly, Samsung plans to use DRAM produced with its 1c process as core die for HBM4, the latest and most advanced HBM chips that Samsung, SK hynix and Micron are preparing for mass production in the second half of this year.

SK hynix and Micron have already sent samples of their next-generation HBM4 chips to major clients for qualification tests, but the chips already sent out were reportedly built using the 1b process. By using the 1c process, Samsung plans to highlight the differentiating features of its HBM4.

As part of this plan, the company will resume its expansion of Plant 4 in Pyeongtaek, Gyeonggi Province. Plant 4 was initially intended to add manufacturing lines for its foundry business, but the company has decided to install lines for its 1c process instead.

Samsung Electronics' 12-layer high-bandwidth memory 3e / Courtesy of Samsung Electronics

The company’s loss-making foundry business is also seeking a rebound.

Samsung foundry is now producing Nvidia’s T239 chipset using its 8 nanometer process. The T239 is the main processor for Nintendo Switch 2, the fastest-selling Nintendo console ever, selling 3.5 million units globally in the first four days after its release. Tech media outlets anticipate that Samsung will be able to generate more than $1.2 billion in sales because of the console.

Expectations are also growing for Samsung’s finer manufacturing processes. Samsung foundry has begun mass production of the Exynos 2500 application processor using its 3 nanometer process for the Galaxy Z Flip 7, which will be unveiled during an event on July 9.

Doubts have been raised about the Exynos 2500, as it was sidelined from Samsung’s flagship Galaxy S25 series, but the company recently improved its production yield and announced on its website that the processor is now in “mass production.”

In the second half of this year, the company will also produce the Exynos 2600 with its 2 nanometer process for the Galaxy S26 series.

Reportedly, Samsung foundry is also making efforts to win orders for Qualcomm’s next generation application processor and Nvidia’s graphics processing units by leveraging its 2 nanometer class and Gate-All-Around technologies.

As a result, analysts are forecasting a rosier outlook for the company’s third-quarter earnings. IM Securities analyst Song Myung-sub suggested that Samsung DS Division’s operating profit will stand at 4.61 trillion won in the third quarter of this year, up 19.43 percent year-on-year.

“Samsung has recently begun full-scale production of its 1b DDR5 and is improving the yield for its 1c process,” Song said. “These developments suggest a potential recovery in its competitiveness in the legacy DRAM segment. However, certification for its 12-high HBM3E targeting Nvidia is seemingly delayed, and the success of its HBM4 based on the 1c process remains uncertain.”