By Heekyong Yang, Hyunjoo Jin and Toby Sterling
SEOUL (Reuters) – Samsung Electronics (KS:) has postponed taking deliveries of ASML (AS:) chipmaking gear for its upcoming manufacturing unit in Texas because it has but to win any main clients for the undertaking, three individuals conversant in the matter stated.
Samsung has been additionally holding off on inserting orders to another suppliers for the $17 billion manufacturing unit in Taylor metropolis, prompting them to search for different clients and ship employees deployed on web site again house, three different individuals conversant in the matter stated.
The delay in gear deliveries is a recent setback to the Taylor undertaking, which is on the coronary heart of Samsung chairman Jay Y. Lee’s ambition to increase past its bread-and-butter reminiscence chips into contract chip manufacturing, which Taiwan’s TSMC dominates.
It underscores the widening gulf between Samsung and rivals akin to TSMC and SK Hynix that are ramping up manufacturing of high-end chips to cater to booming demand from synthetic intelligence purposes.
ASML, the world’s largest chipmaking gear provider, minimize its 2025 gross sales forecast on Tuesday, citing weak point in markets aside from AI, and delayed fabs.
The Dutch firm didn’t title purchasers who’ve delayed their fabs. Reuters is the primary to report that Samsung has pushed again deliveries of some ASML gear.
Two of the sources stated the delayed shipments to Samsung’s Taylor manufacturing unit contain ASML’s superior chipmaking gear known as excessive ultraviolet (EUV) lithography.
Considered one of them stated the deliveries have been scheduled earlier this yr however the machines haven’t been shipped but. The third supply stated Samsung has pushed again supply of some ASML gear to the manufacturing unit, with out elaborating on the gear or the revised supply schedule.
EUV machines, which price round $200 million every, create design options on silicon wafers by utilizing beams of sunshine and are extensively used to fabricate superior chips present in smartphones, digital units and AI servers.
It was not clear what number of EUV machines Samsung had ordered or what fee phrases it had entered into.
ASML and Samsung declined to touch upon the ASML matter. All the sources Reuters spoke to declined to be recognized as they weren’t authorised to speak to the media.
‘STRANDED ASSET’
Samsung stated in April manufacturing on the Taylor plant would start in 2026 as an alternative of 2024. Samsung’s Lee instructed Reuters earlier this month that the corporate was going through challenges on the manufacturing unit.
Sources and analysts stated there was a threat of additional delays.
“With out new quantity purchasers, even the 2026 timetable appears to be like difficult… We see a risk of an additional delay and an asset write-off,” Macquarie analysts stated in a September report, including the fab may very well be “a stranded asset”.
Lee Min-hee, an analyst at BNK Funding & Securities, stated that if Samsung doesn’t place orders for different gear by early subsequent yr, it may sign additional delays, given the lead time required to begin manufacturing.
The South Korean agency goals to finish building of the constructing by early subsequent yr, an individual conversant in the matter stated.
Samsung stated in a press release to Reuters that there is no such thing as a change to its plan to begin manufacturing of its Taylor fab in 2026, and the return of its personnel is a part of a routine rotational shift.
WIDENING GAP WITH TSMC
Regardless of years of efforts to tackle TSMC, Samsung’s market share in contract manufacturing, completed in factories referred to as fabs or foundries within the semiconductor business, dropped 8 proportion factors within the final 5 years to 11% as of the primary quarter of 2024, whereas TSMC’s market share rose to 61.7% over the identical interval, in line with information from analysis agency Statista.
Samsung’s market share erosion underscores technological challenges the agency faces in mastering superior chip manufacturing to lure the likes of Apple (NASDAQ:) and Nvidia (NASDAQ:) away from TSMC, analysts stated.
ASML finance chief Roger Dassen stated on Tuesday that there are “very particular aggressive points within the foundry enterprise”, and a few clients are slowly ramping up manufacturing of superior chips and delaying fabs.
Analysts say Intel (NASDAQ:), which is struggling one among its worst durations and minimize its capital spending plan for 2025, can be partly the rationale for ASML’s weaker outlook.
In contrast, TSMC anticipated on Thursday its first fab in Arizona to see quantity manufacturing in 2025 and stated the manufacturing unit has acquired robust dedication from U.S. clients.
Samsung’s struggles in its foundry enterprise has additionally impacted its factories in South Korea, the place it’s grappling with low manufacturing yields of its most superior 3-nanometer chips, individuals conversant in the matter stated. Samsung can be delaying investments into new foundry chip traces within the metropolis of Pyeongtaek, south of Seoul, two of the individuals stated.
Samsung declined to touch upon the Korean manufacturing unit matter.
Reflecting Samsung’s slowing capability enlargement, ASML reported that gross sales to South Korea – house to Samsung and its smaller rival SK Hynix – shrunk by one-third within the third quarter to 889 million euros ($965 million) from the earlier quarter, in line with its presentation supplies.
Samsung can be shedding floor in its core reminiscence chip market, with SK Hynix outshining it to change into probably the most dominant provider of dear high-bandwidth reminiscence (HBM) chips used to construct Nvidia’s AI chipsets.
“I believe at present with out AI, the market could be very unhappy for those who ask me,” ASML CEO Christophe Fouquet stated in a convention name this week, including a slower-than-expected restoration for cell units and PCs will lengthen into subsequent yr.
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