Google Shifts Foundry Partnership from Samsung to TSMC for Tensor G5 Chip

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Samsung Electronics' recent win of Google's Tensor G4 order last year had raised hopes of narrowing the gap with TSMC in the foundry sector. However, recent developments suggest a shift in Google's strategy, potentially impacting Samsung's market position.

www.businesskorea.co.kr/index2.html, Jul. 03, 2024 – 

Currently, Google is entrusting the production of the 4th generation AP Tensor G4, which will be installed in the Pixel 9 series set for release in the second half of this year, to Samsung Electronics' 4-nanometer foundry. This collaboration initially sparked optimism for Samsung's foundry business.

However, according to industry sources on 3rd, TSMC and Google have recently entered the 'tape-out' stage for mass production of the 5th generation AP 'Tensor G5' to be installed in the next-generation smartphone 'Pixel 10' series, scheduled for release next year. Tape-out is the final stage before semiconductor mass production, where the final design blueprint is fed into the production line.

"The 'Tensor G5' to be installed in this smartphone will be produced through TSMC's 3-nanometer foundry process and is expected to significantly improve performance compared to the existing product (Tensor G4)," said an industry source. "Through this, Google plans to enhance its capabilities in the high-end artificial intelligence (AI) smartphone market."

Previously, the industry had only speculated about the possibility of cooperation between TSMC and Google on the Tensor G5, but recently, the two companies appear to be entering the full-scale mass production stage. This development indicates a significant shift in Google's foundry partnership, moving from Samsung to TSMC for its next-generation AP.

"Last year, Samsung Electronics won the order for Google's Tensor G4, raising expectations that it could continue to narrow the gap with TSMC in the foundry sector," noted an industry insider. "However, as Google collaborates with TSMC on the next-generation AP Tensor G5, the likelihood of future AP production being entrusted to TSMC is increasing."

From Samsung Electronics' perspective, this shift exposes the company to the possibility of a major customer transitioning to its competitor, TSMC. It is known that Samsung Electronics has not yet received any clear large-scale customer orders in the foundry sector. As a result, Samsung Electronics' market share in the first quarter of this year decreased by 1 percentage point to 13% from the previous quarter (14%). In contrast, TSMC's market share increased by 1 percentage point from 61% to 62% during the same period.

The key for Samsung Electronics will be how many large-scale customers it can attract in the future through its 'Gate-All-Around (GAA)' technology, which it has touted as an advantage of its 3-nanometer process. Currently, Samsung Electronics is the only foundry company applying GAA in the 3-nanometer process.

As the semiconductor industry continues to evolve, the competition between TSMC and Samsung Electronics remains fierce.

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