Samsung Begins to Produce Third 3nm Chip Amid Large Losses On DRAM & NAND

Samsung this week reported their monetary outcomes for the second quarter of 2023, closing the guide on an particularly bleak quarter of the 12 months with a large $3.4 billion working loss. The losses, stemming from its semiconductor enterprise, come amid a continued stoop in 3D NAND and DRAM gross sales volumes and costs. Although buried deep in Samsung’s earnings report was a speck of fine information, as effectively: the corporate has began to provide its third 3nm chip design with steady yield.

Discussing Samsung Foundry’s earnings, the corporate stays unsure about demand restoration within the second half. “Demand to get well step by step underneath appreciable uncertainty over the depth of a market restoration in 2H, with client sentiment to rebound amid easing inflation and as clients wind down stock changes,” an announcement by Samsung reads.

Extra broadly, Samsung income dropped sharply, with the corporate recording a 22% year-over-year decline to $46.915 billion. Earnings of Samsung’s semiconductor divisions — together with reminiscence, SoCs, and foundry operations — declined to $29.86 billion, 48% YoY drop. Gross sales of reminiscence hit $7 billion, a 57% year-over-year decline, although eking out a 1% quarter-over-quarter enhance. General, Samsung recorded a $3.4 billion loss from its semiconductor operations as a consequence of low demand for commodity reminiscence and declining commodity 3D NAND and DRAM costs.

However there have been some brilliant spots in Samsung’s DRAM enterprise, as effectively. Demand for high-performance high-density premium merchandise like DDR5 modules and HBM reminiscence elevated, which helped to partially offset sluggish gross sales of commodity reminiscence.

“Bit development exceeded steering as we expanded gross sales of server merchandise whereas actively responding to rising demand for DDR5 and AI-use HBM,” Samsung mentioned. “Demand for high-density/high-performance merchandise stayed robust, pushed by elevated investments specializing in AI by main hyperscalers.”

Whereas Samsung expects demand for reminiscence to get well within the second half, the corporate is anticipating to enact further manufacturing cuts to additional help reminiscence costs.

“We anticipate to see a gradual restoration of the reminiscence market within the second half of the 12 months, however the tempo of the market rebound is more likely to rely on our macro variables,” mentioned Jaejune Kim, govt vp of reminiscence division. “

Kim mentioned that Samsung could be making additional alterations to the output of some merchandise, together with 3D NAND.

“Manufacturing cuts throughout the trade are more likely to proceed within the second half, and demand is anticipated to step by step get well as purchasers proceed to destock their (chip) stock,” an announcement by Samsung reads.

Lastly, as famous earlier, as a part of Samsung’s earnings report the corporate additionally revealed that it is began manufacturing on its third 3nm (GAAFET) chip.

“Mass manufacturing of our third GAA product goes easily because of the stabilization of the 3nm course of, and we’re creating an improved course of for 3nm as deliberate primarily based on mass manufacturing expertise with GAA,” a statement by Samsung reads.

It recently transpired that Samsung Foundry has been producing the Whatsminer M56S++ cryptocurrency mining ASIC on its SF3E node (previously often called 3GAE, 3nm gate-all-around early) for a while. It turned out a bit later that there’s PanSemi, one other developer of cryptocurrency mining {hardware}, that makes use of Samsung’s SF3E to make its mining ASIC. Now, Samsung confirms that there’s one other buyer that makes use of its newest manufacturing node, although the corporate is not disclosing any additional particulars in regards to the consumer or their chip.

Producing tiny cryptocurrency mining ASICs is an effective approach check a brand new fabrication course of on a business software since even with a comparatively excessive defect density, yields of such chips will probably be ok to be viable. In the meantime, Samsung Foundry’s SF3E course of expertise guarantees to extend efficiency and reduce down energy consumption of cryptocurrency mining ASICs (vs. comparable chips made on previous-generation nodes) and these are precisely that targets that miners want to hit to spice up their earnings.

Sources: Samsung, Reuters, Nikkei, SeekingAlpha