Regarding the continuous struggle of its foundry business, Samsung has reportedly decided to make another move, as its semiconductor division (DS) plans to undertake a major organizational restructuring within the year, according to a report by Chosun Biz.

Through the restructuring, DS Division President (Vice Chairman) Jeon Young-hyun is said to focus on addressing major issues related to organizational culture, such as the lack of communication between departments and team self-interest, the report notes.

The revelation follows Samsung’s reported up to 30% layoffs in overseas workforce last week, as noted by Reuters. The plan, set to be implemented by the end of this year, will affect jobs across the Americas, Europe, Asia, and Africa.

Citing industry sources, the report indicates that Samsung Electronics’ DS division plans to strengthen collaboration processes by integrating existing team-based structures into a project-centered model, with an aim to resolve issues arising from the siloed operation of departments.

As a comprehensive semiconductor company with a broad range of businesses, Samsung faces quite a few challenges, while the proliferation of business units and task forces leads to competition and friction between departments. In the development of chips or processes, differing interests among departments—such as semiconductor design, fabrication, and reliability evaluation—can cause communication problems, which may ultimately lead to business failures.

Samsung has been fighting to catch up with its rivals, not only in the foundry sector but in memory as well. Chosun Biz notes that the Korean semiconductor giant is lagging behind competitors in areas like high-bandwidth memory (HBM), cutting-edge DRAM, and foundry technology over the past 2-3 years, which may be attributed to this organizational culture.

Samsung’s foundry division has been working out to mass-produce 3-nm GAA (Gate-All-Around) technology for around three years but still struggles with customer acquisition. A report by The Korea Times states that the yield for Samsung’s 3nm process remained in the single digits until Q1 this year, and slightly improved to about 20% in Q2, though still significantly below the 60% threshold generally needed for mass production.

In terms of DRAM, Samsung seems to gradually lose the leading edge as it has started to fall behind SK hynix, especially in the HBM market. In its latest attempt, Samsung teams up with its foundry rival, TSMC, on the development of HBM4, according to Business Korea.

Moreover, Samsung is facing challenges on the DDR5 DRAM market. Chosun Biz suggests that discrepancies between the quality goals set by the development department and the actual specifications of the mass-produced product delayed Samsung’s entry into the server DDR5 DRAM market by more than 3-6 months, compared to SK hynix.

The report took its setback in the 10-nm 5th generation (1b) DDR5 server DRAM last year as an example. The product, which supplied to Intel, failed to meet the promised performance and was deemed substandard.

In early September, another report by Korean media outlet ZDNet reveals that the tech giant might be facing difficulties in its cutting-edge mobile DRAM, as Samsung’ Mobile eXperience (MX) Division reportedly raised concerns with the DS Division about delays in the delivery of 1b-based LPDDR (low-power DRAM) samples, which are intended to be used in the Galaxy S25 series.

A Samsung Electronics spokesperson cited by Chosun Biz admitted that there continues to be a disconnection between the departments developing new processes and those responsible for mass production, with serious issues arising from the shifting of blame for failures.

However, would Samsung’s latest effort work out? An industry insider cited by the report notes that Intel has attempted to make a change through the “IDM 2.0” strategy over the past three years, but solving these issues in a short period of time has proven difficult. He suggests that it is necessary to go beyond just restructuring to fundamentally change the organization.

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• [News] Samsung Partners with TSMC, Its Foundry Rival, on HBM4 Development
• [News] Samsung Reportedly Buckling Under Pressure, with Plans to Cut Overseas Workforce by Up to 30%

(Photo credit: Samsung)

Ahead of AMD’s October launch of Instinct MI325X, the U.S. chip giant is said to have several issues with its laptop OEMs, which results in poor execution, a report by Tom’s Hardware notes. Citing remarks from analysts, the report describes the two parties’ relation now as a “Cold War ice age,” hurting their mutual trust.

The report, citing AC Analysis, says that the main contradiction arises from AMD’s current strategy of prioritizing enterprise chips over consumer products, with laptop OEMs complaining about the “miscommunication, unfulfilled promises, and generally poor treatment.” The situation, according to them, is similar to Intel’s behavior during its peak years.

It is interesting to note that the situation seems to coincide with AMD CEO Lisa Su’s recent exclamation that AMD is a “data center-first company,” as data center contributed to over 50% of the company’s revenue last quarter.

Another report by German media outlet ComputerBase also reports that AMD is still suffering from the same challenges it has had in the past. For instance, problems with supply and related issues have delayed the release of new Strix Point laptops. According to ComputerBase, one source even accused AMD of probably leaving billions of US dollars on the table with its partners over the years.

Tom’s Hardware observes that due to the aforementioned reasons, the reaction of AMD’s Strix Point chips among OEMs has been somewhat tepid, despite consumer interest.

The report notes that currently, BestBuy offers only three brands with AMD’s latest chips—Asus, HP, and MSI. HP and MSI each have one model, while Asus has 13 models featuring the AMD Ryzen AI 300 series chip.

This is in sharp contrast with Qualcomm, the report notes. Even the company is a latecomer in the laptop market, the smartphone chip giant’s launch of the Snapdragon X processor generated significant excitement among both the public and laptop manufacturers, as seven brands have already released 12 different models featuring the new Arm chip.

AMD is also lagging behind its rival Intel, which still dominates the laptop market despite its recent slump. According to Intel, its Lunar Lake, manufactured with TSMC’s 3nm, is expected to power more than 80 new laptop designs across more than 20 original equipment manufacturers, delivering AI performance at a global scale for Copilot+ PCs.

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• [News] AMD MI325X Reported to Debut in October, Claiming AI Supercycle Has Just Started
• [News] AMD Could Emerge as a Prospective Buyer for Intel’s Potential Sale of Altera

(Photo credit: AMD)

For Intel, there are finally some good news around the corner. According to a report by The Register, the EU has approved USD 1.9 billion in aid for the struggling giant’s plant in Poland, but with the condition that the company does not abandon the project amid its crisis.

The information was announced on Friday by Poland’s Deputy Prime Minister Krzysztof Gawkowski, the report notes, that the European Commission has approved a state aid package of USD 1.9 billion (7.4 billion zlotys) for Intel. Citing Gawkowski’s remarks, the report reveals that the investment, including the aid package and overall costs, amounts to more than USD 6.47 billion (25 billion zlotys).

The announcement follows just over a year after Intel revealed its intention to build a USD 4.6 billion assembly and testing facility near Wroclaw, Poland. According to The Register, this project is expected to complement Intel’s other projects in the region and beyond, including its€30 billion chip fabrication plant in Magdeburg, Germany.

According to Intel’s previous announcement, the investment in Poland will contribute to the Europeans goal of bringing back 20 percent of global semiconductor manufacturing capacity to the region by 2030. The company states that its planned back-end manufacturing investment in an assembly and test facility in Poland, combined with the existing fab or front-end chip manufacturing site in Ireland and the planned chip manufacturing site in Germany, will create an end-to-end leading-edge semiconductor manufacturing value chain in Europe.

A rendering shows the state-of-the-art semiconductor assembly/test facility that Intel announced plans to build in Wrocław, Poland. Announced on June 16, 2023, the site will help to meet demand for assembly and test capacity that Intel anticipates by 2027. (Credit: Intel)

However, it is worth noting that due to delays of subsidy approvals. Intel has already been said to postpone its construction of Fab 29.1 and 29.2 in Magdeburg, as the new timeline now pushes the start of construction to May 2025. As the possibility of putting a halt to the German project could not be ruled out amid the company’s crisis, whether a follow-up plan regarding delaying or canceling the Polish plant comes into spotlight.

The Register notes that Intel had previously stated that the Polish facility would employ around 2,000 workers and would be responsible for processing raw wafers produced by nearby fabs, cutting them into individual chips and chiplets for packaging.

If Intel’s Polish project has been carried out as planned, the semiconductor heavyweight may have to wait until the end of the year to access the funds as a few formalities remain, the report points out. For instance, the Polish government still needs to pass certain legislation and meet requirements set by the European Commission before the deal can be finalized.

Regarding the matter, a spokesperson of Intel said that the company values the Polish government’s ongoing support and partnership as the two parties work together towards the shared goal of a more resilient global semiconductor supply chain, according to The Register.

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• [News] Intel Reportedly Sought Commerce Secretary Raimondo’s Help over U.S. Reliance on TSMC
• [News] Uncashed Checks of the Struggling Giant: Intel’s Unfulfilled Expansion Plans in a Nutshell

(Photo credit: Intel)

Ahead of Intel’s upcoming board meeting in mid-September, rumors have been circulating that the struggling giant may be mulling to selling its FPGA unit Altera, with AMD and Marvell being potential buyers. However, according to an interview with Altera’s CEO by CRN, Altera’s plan for an initial public offering (IPO) remains unchanged, as it pursues to be listed by 2026.

The information is confirmed by Sandra Rivera, Altera’s CEO. Citing her remarks, CRN notes that the FPGA unit is working on its plan, which involves selling a stake in Altera, not the entire company. Rivera further stated that this has been Altera’s communicated strategy for over a year, with an IPO planned for 2026.

Citing Rivera, the report pointed out that though Altera began operating independently from Intel at the start of 2024, it is still in the process of separating from many of the general and administrative functions of its parent company, with a target completion date of January 1, 2025.

Intel acquired Altera in 2015 for USD 16.7 billion, and the latter dropped its name afterwards, known as the Programmable Solution Group under the U.S. semiconductor giant.

It was not until 2023 that Intel announced its intention to spin off the Programmable Solutions Group into a separate, wholly-owned company. In February, 2024, the FPGA unit announced that it would revive the Altera brand, CRN reported.

The spin-off of the FPGA business is intended to achieve two goals: providing Intel with additional liquidity to fund CEO Pat Gelsinger’s costly revitalization strategy and enhancing the business opportunities for the FPGA company, according to CRN.

Intel’s board is set to meet this week to discuss restructuring plans, which may include separating its design division from its foundry operations. Citing Intel CFO David Zinsner’s comments at an investor meeting last week, a report by CNBC notes that dividing the two businesses would be a logical move, as the company is trying to create more separation between these two businesses.

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• [News] AMD Could Emerge as a Prospective Buyer for Intel’s Potential Sale of Altera
• [News] Intel Reportedly Considering Foundry Spin-Off or Merger to Mitigate Losses

(Photo credit: Intel)

In a last-ditch effort before the upcoming board meeting this week, Intel is said to be seeking assistance from the U.S. government. The latest report by CNBC notes that Intel CEO, Pat Gelsinger, turned to Commerce Secretary Gina Raimondo recently, expressing his disappointment with the heavy dependence of U.S. companies on TSMC, the Taiwanese foundry heavyweight.

According to CNBC, after meeting with Intel, Raimondo followed up by meeting with several public market investors to emphasize the significance of U.S. chip manufacturing amid the rising geopolitical risks surrounding Taiwan. Her aim was to encourage shareholders in companies like NVIDIA and Apple to understand the economic advantages of having a U.S.-based foundry capable of producing AI chips, the sources cited by the report said.

Interesting enough, Jensen Huang, CEO of NVIDIA, mentioned yesterday that the U.S. chip giant heavily relies on TSMC for producing its most important chips, saying TSMC’s agility and ability to respond to demand are incredible. Thus, shifting orders to other suppliers could reportedly lead to a decline in chip quality.

Intel has introduced its Lunar Lake processors in early September, with the target to shake up the AI PC market. However, the chips are outsourced to TSMC, manufactured with the foundry giant’s 3nm node.

Getting stuck in its current situation, Intel is said to be pushing U.S. officials to expedite the release of funding, another report by Bloomberg notes. Earlier in April, Intel and Biden administration announced up to USD 8.5 billion in direct funding under the CHIPS Act.

The company is slated to receive USD 8.5 billion in grants and USD 11 billion in loans under the 2022 Chips and Science Act, but this funding is contingent on meeting key milestones and undergoing extensive due diligence, according to Bloomberg. Therefore, like other potential beneficiaries, Intel has not yet received any money.

An official cited by CNBC said that disbursements are anticipated by the end of the year.

Both the U.S. Commerce Department and an Intel spokesperson declined to comment, according to CNBC.

Regarding the latest development of Intel’s plan to shedding more than 15% of its workforce, a report by CTech notes that Intel may lay off over 1,000 employees in Israel as global cuts begin.

CTech states that Intel has been mindful of geopolitical factors and the timing of local holidays in Israel. Therefore, it would be rather unexpected for the company to initiate layoffs in the country before or during the holiday season, which begins in early October and extends through most of the month.

Citing Gelsinger’s remarks, the report notes that the restructuring process will continue until the end of the year, allowing Intel’s Israeli branch a window of time to start the layoffs after the holidays.

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• [News] CEO Jensen Huang Highlights Strong Demand, Stating that Everyone is Counting on NVIDIA
• [News] Intel Reportedly Outsources All Sub-3nm Process Production to TSMC

(Photo credit: Intel)