Samsung Foundry’s 3nm Chips Are Losing to TSMC, and It’s Clear Why

Samsung Foundry has faced multiple challenges, one of which explains why the Galaxy S25 series will pack the Snapdragon 8 Elite chip in all regions. It also recently lost one of its key clients, Google, to TSMC. Now, a report from Korean media sheds light on why Samsung is losing clients to TSMC.

Here’s why Samsung Foundry is struggling to compete with TSMC

Whether you believe it or not, Samsung Foundry and TSMC are two of the biggest giants in chip manufacturing. But the former’s struggles have cost the company its reputation, which is why clients are looking elsewhere for chip makers. Korean outlet Chosun reveals that Samsung Foundry’s 3nm chip manufacturing yield rates are much lower compared to TSMC’s.

According to the report, Samsung’s 3nm yields are just 50%, compared to TSMC’s solid 90%. These yield rates play a crucial role in chip manufacturing. Simply put, if Samsung has a 50% yield rate, it means nearly half the chips it makes pass the quality test. Meanwhile, 9 out of 10 chips from TSMC meet the standard. That’s a huge shakeup.

This explains why OEMs are jumping ship from Samsung Foundry and finding a safe harbor at TSMC. Even though reports say Samsung will use its own Exynos chips for the Galaxy Z Flip 7, that alone doesn’t guarantee it will match TSMC’s quality.

A few weeks ago, we also heard that Samsung is betting big on in-house chip making, which, if successful, could mean the Galaxy S26 series ships with Exynos chips partially or fully in all regions. There’s still some time before that happens, but for now, the outlook isn’t very bright.

Samsung still received orders for 7nm and 8nm chips from Nintendo, but there’s growing competition from China-based foundries, which could make things tougher in the long run. We’ll see how the chips fall for both parties.