Samsung delays taking deliveries of ASML chip gear for its new US manufacturing facility, sources say

Samsung Electronics (005930.KS) has postponed taking deliveries of ASML (ASML) chipmaking tools for its upcoming manufacturing facility in Texas because it has but to win any main clients for the venture, three folks accustomed to the matter stated.

Samsung has been additionally holding off on inserting orders to another suppliers for the $17 billion manufacturing facility in Taylor metropolis, prompting them to search for different clients and ship employees deployed on website again residence, three different folks accustomed to the matter stated.

The delay in tools deliveries is a recent setback to the Taylor venture, which is on the coronary heart of Samsung chairman Jay Y. Lee’s ambition to broaden 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 resembling 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 tools provider, lower its 2025 gross sales forecast on Tuesday, citing weak spot in markets apart from AI, and delayed fabs.

The Dutch firm didn’t identify shoppers who’ve delayed their fabs. Reuters is the primary to report that Samsung has pushed again deliveries of some ASML tools.

Two of the sources stated the delayed shipments to Samsung’s Taylor manufacturing facility contain ASML’s superior chipmaking tools referred to as excessive ultraviolet (EUV) lithography.

Certainly one of them stated the deliveries have been scheduled earlier this 12 months however the machines haven’t been shipped but. The third supply stated Samsung has pushed again supply of some ASML tools to the manufacturing facility, with out elaborating on the tools 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 gadgets and AI servers.

It was not clear what number of EUV machines Samsung had ordered or what cost phrases it had entered into.

ASML and Samsung declined to touch upon the ASML matter. The entire sources Reuters spoke to declined to be recognized as they weren’t authorised to speak to the media.

Customary asset

Samsung stated in April manufacturing on the Taylor plant would start in 2026 as a substitute of 2024. Samsung’s Lee informed Reuters earlier this month that the corporate was dealing with challenges on the manufacturing facility.

Sources and analysts stated there was a danger of additional delays.

“With out new quantity shoppers, even the 2026 timetable seems to be difficult… We see a chance of an extra delay and an asset write-off,” Macquarie analysts stated in a September report, including the fab might be “a stranded asset”.

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Lee Min-hee, an analyst at BNK Funding & Securities, stated that if Samsung doesn’t place orders for different tools by early subsequent 12 months, it might sign additional delays, given the lead time required to start out manufacturing.

The South Korean agency goals to finish building of the constructing by early subsequent 12 months, an individual accustomed to the matter stated.

Samsung stated in an announcement to Reuters that there is no such thing as a change to its plan to start out manufacturing of its Taylor fab in 2026, and the return of its personnel is a part of a routine rotational shift.

Widening the hole with TSMC

Regardless of years of efforts to tackle TSMC, Samsung’s market share in contract manufacturing, achieved in factories often known as fabs or foundries within the semiconductor trade, 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 response to 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 and Nvidia 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, which is struggling considered one of its worst durations and lower its capital spending plan for 2025, can be partly the explanation for ASML’s weaker outlook.

Against this, TSMC anticipated on Thursday its first fab in Arizona to see quantity manufacturing in 2025 and stated the manufacturing facility has acquired sturdy 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, folks accustomed to the matter stated. Samsung can be delaying investments into new foundry chip traces within the metropolis of Pyeongtaek, south of Seoul, two of the folks stated.

Samsung declined to touch upon the Korean manufacturing facility matter.

Reflecting Samsung’s slowing capability enlargement, ASML reported that gross sales to South Korea – residence 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 response to its presentation supplies.

Samsung can be shedding floor in its core reminiscence chip market, with SK Hynix outshining it to develop into essentially 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 can be very unhappy when you ask me,” ASML CEO Christophe Fouquet stated in a convention name this week, including a slower-than-expected restoration for cellular gadgets and PCs will prolong into subsequent 12 months.

($1 = 0.9213 euros)

(Reporting by Heekyong Yang, Hyunjoo Jin, Toby Sterling, Fanny Potkin and Kyrstal Hu; Modifying by Miyoung Kim and Muralikumar Anantharaman)