If Samsung Foundry secures a new contract from Nvidia, the semiconductor industry could be on the verge of a seismic shift.
Samsung has been clawing its way back from a major stumble in 2022, when its dismal 35% yield rate drove Qualcomm to move its chip production entirely to rival TSMC, which at the time boasted a far more efficient 70% yield.
Yield problems still haunt Samsung Foundry, and its future now hinges on whether it can deliver the Exynos 2600 processor in sufficient quantities for the upcoming Galaxy S26 series. Samsung’s previous attempt with the Exynos 2500 faltered due to similar manufacturing issues, forcing the company to switch to Qualcomm’s Snapdragon 8 Gen 3 chips for all Galaxy S25 models-a move that cost Samsung an unexpected $400 million.
This time around, Samsung is racing against the clock to ramp up its 2nm yield in time for the Galaxy S26 launch, targeting global markets outside of the U.S., Canada, and China. If successful, this would mark the debut of 2nm chips in consumer smartphones-an impressive milestone if Samsung can pull it off.
In an even bigger play, a report from South Korea claims Samsung Foundry is vying for a contract to manufacture Nvidia’s next-generation GPU using its 2nm node. GPUs, with their strength in parallel processing, are key to AI acceleration, making them ideal for powering the surge in Artificial Intelligence and Machine Learning applications. CPUs, by contrast, are less suited for AI due to their sequential nature.
At present, Samsung’s 2nm yield rate sits at 40%, but projections suggest it could reach the industry-standard 70% by year-end-an inflection point that could re-establish Samsung as a serious alternative to TSMC. Currently, Samsung Foundry holds a modest 7.7% global market share, dwarfed by TSMC’s dominant 67.6%.
Signs of recovery are emerging. Samsung Foundry recently produced the Nvidia-designed Tegra T239 SoC for the Nintendo Switch 2 using its older 8nm DUV process, snatching that business away from TSMC. If Samsung can land the Nvidia GPU deal, it won’t just boost its reputation-it could mark the beginning of a new era in chipmaking competition.