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Nvidia and Samsung still cannot finalize chip manufacturing deal

Earlier this year Nvidia Corp. officially named Samsung Electronics its manufacturing partner. However, as it appears, the companies still have not signed any actual deals because negotiations are proceeding with difficulties. The consequence of prolonged negotiations could result in later-than-expected release of Samsung-made Nvidia chips.

Nvidia wants Samsung Electronics to guarantee certain level of yield rate at 14nm for its graphics processing units, reports BusinessKorea. The yield rate is as a condition of a provisional contract with Samsung Electronics, the web-site emphasizes. The negotiations are proceeding with difficulties because Samsung’s 14nm low-power plus (14LPP) fabrication process is still not really mature.

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Theoretically, engineering and business decision operations are isolated. Nvidia’s chip designers are working on chips to be made by Samsung, whereas other people are negotiating over pricing. If talks take too much time, then the start of volume production may be delayed, but since Nvidia will need Samsung’s production services only in 2016, it still has weeks or even months to negotiate a deal.

At present, Samsung Foundry is the only contract maker of semiconductors that produces chips using 14nm FinFET process technology in high volume. Taiwan Semiconductor Manufacturing Co. is expected to start mass production of chips using its 16nm FinFET process this month. Intel Corp.’s foundry division offers 14nm FinFET services to select companies and, based on rumours, not everyone is happy with the technology.

According to unofficial information, Nvidia recently taped out its first code-named GP100 graphics processing unit, which belongs to the “Pascal” family of products. The chip is set to be produced using TSMC’s 16nm FinFET+ (CLN16FF+) fabrication process.

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One analyst believes that Nvidia plans to use its contract with Samsung’s not only to get access to leading-edge fabrication processes and to ensure high-volume supply of chips, but also in order to cut-down its costs. In fact, a number of fabless semiconductor designers are believed to be using contracts with Samsung as a leverage in their negotiations with TSMC over pricing.

“We believe that Nvidia has a second source for foundry wafers in Samsung, outside of TSMC,” said Doug Freedman, an analyst with RBC Capital Markets, in a note to clients. “While it may be a small part of the wafer supply today, it should create a tailwind for [gross margin percentage] going forward as we believe that non-TSMC wafers can be purchased at as much as 10% below present cost levels.”

Nvidia and Samsung did not comment on the news-story.

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KitGuru Says: In fact, chip designers and foundries are always negotiating over yields and costs, which is a normal process. No actual conclusions can be made because of prolonged talks.

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20 comments

  1. This is what you can read into this situation – Nvidia is suing Samsung over graphics IP so, Samsung is stuffing up Nvidia over access to their manufacturing. Like I said last year, Nvidia is a dead patent troll company walking. It has taken on the big guys and will be burnt badly.

  2. This is what you can read into this situation – Nvidia is suing Samsung over graphics IP so, Samsung is stuffing up Nvidia over access to their manufacturing. Like I said last year, Nvidia is a dead patent troll company walking. It has taken on the big guys and will be burnt badly.

  3. TheGoodBadWeird

    This is an interesting find! Didn’t everybody think Samsung and Nvidia already had an agreement?

    The news about potential yield issues of the Samsung 14nm FinFET LP-node made the round not long ago. Many Samsung customers have jumped from Samsung back to TSMC recently. If Nvidia wants a certain yield rate guaranteed and Samsung can “possibly” not deliver it, many questions are raised here.

    The yields and maturity of the Samsung FinFET process are not quite clear yet. The further development of this could be quite interesting for the industry. Nvidia and Samsung will become partners as Apple and Samsung always were. They just haggle about the conditions as real business man do!

    BTW:
    Ignore the user Nvidiots! He is so utterly biased and uninformed at the same time it hurts to read his comments! *smile*

  4. Nvidia is suing samsung over stupid shit. I am surprised they’re trying to make deals. Hopefully it all works out, and NVIDIA gets put in its place. Samsung is 1000 times bigger than Nvidia. It is 20 percent of S. koreas GDP. It could stomp nvidia if it wanted to.

  5. The situation is a little more complicated in this case. Samsung is a conglomerate with many different sub- and daughter companies. There is not one Samsung, but many. In example:
    -Samsung mobile
    -Samsung displays / TVs
    -Samsung foundries
    -Samsung electornics, tools, household, construction vehicles a.s.o

    Nvidia actually sues ‘Samsung mobile’. That is the company branch responsible for smartphones, tablets and whatever similar device. Nvidia claims Samsung uses their GPU-patents without paying, a claim we heard from other companies against Samsung too often. Patent law-suites between Apple and Samsung go on since years.

    Now Nvidia wants to get into a deal with Samsung Foundry to produce future chips, probably from their Tegra chip-line in a Samsung 14nm node with FinFETS. Both can do business without the sued Samsung mobile, which is practically a cousin company inside of Samsung. They are still related and the mobile devices get produced over the Foundry, but both have different and independent money-bags.

    So if Nvidia would win the ongoing lawsuite-war with Samsung mobile, then Samsung Foundry would not be influenced directly. In conclusion to this both Nvidia and Samsung Foundry could still do business. The article only states ongoing negotiation about the exact conditions. Further nothing is known. There is still time till 2016 and as the article states it could be business as usual.

  6. When a shill and astroturfer such as yourself feels so threatened by my comments, I feel immense pride in my work to expose the truth.

  7. Charles Charalambous

    Hold on so toms hardware review for the 300 series comes out and shows that actually it is a lot weaker than the sites who were provided a free card by AMD stated (I wonder why). AMD then refuse to give sites a card because of negative comments, which would not matter if they were actually confident in the product. Then they decide to do a reviewers guide and the benchmarks for comparison where using 0 aa and even 0af. 0AF IN 2015 on a card that costs over £500 really? Not to mention AF is not taxing. As if that was not enough, the settings they used avoided going over 4GB. Which is odd since they claimed the bandwidth reduction thanks to HBM Should cope with this.

    Do you really not smell something extremely fishy here?

    Also Kitguru have been proving many times in posts by over people to hit Nvidia hard when they made some absolutely disgraceful decisions and mistakes.

    Negative comments? Because no company has anything negative about them right? More like are they prepared to lie and hype the card as something better than it is or not. I want the fury x to be good, competition is really needed, however there is a big rat here

  8. So butt hurt

  9. To add to what TheGoodBadWeird said, the same situation is happening from years between Apple and Samsung – Apple is suing Samsung Mobile for patents, but has contracts with Samsung foundries, if I’m not mistaken, to produce components for the iPhones. It’s not a problem.
    And Samsung being a bigger company doesn’t automatically mean they can stomp over nVidia. They are not really in the exactly same market, they do have a common market but only in the mobile devices, while nVidia’s primary markets are desktop and laptop GPUs and Samsung is not in them… yet. If they acquire AMD they will be rivals, but I don’t know how likely that is to happen.

  10. I don’t i understand where all this hate towards KitGuru is coming from. I haven’t read anything that was incorrect and in fact i prefer KitGuru over many other sites because i can rely on the information that is posted here. If they want to not provide a card to a site that is entirely their own prerogative but as has already been stated cards will still be provided by other manufacturers so reviews will be posted anyways. And i have to agree with you that AMD’s internal benchmarks are very sketchy. I have been very eagerly following news leading up to the Fiji XT release so none of this is a negative comment. Its merely speculation based on strong evidence we have been presented with from multiple sources. If AMD thinks that it is untrue then they should present evidence disproving it rather than withholding an opportunity for their hatdware to disprove it in a review. Nothing about the way AMD is handling this release is very positive in my opinion. From not announcing at Computex to the interesting benchmark choices im afraid that the Fury X is not going to turn out being the reinvigoration of competition that many of us were hoping for. Regardless of whether you like Nvidia or AMD you should be rooting for a very powerful and competitive Fury X. Competition is good for everyone regardless ofbwhatbyou prefer. I just hope the Fury X can live up to that.

  11. Charles Charalambous

    Entirely agree with you 100%

  12. oh, you said that? too bad nvidia didn’t listen to a retard and increased their market share to 78%

  13. My EVGA GTX 970 SC has samsung chips!

  14. How is bragging exposing the truth? Or have you idiots of today changed the definition of truth because you are so dumbed down?

  15. I don’t get it! Why can’t they just go with Elpida Or Hynix if Samsung is jerking them around? There is options baby! Options!

  16. Nvidia and Intel would be a better fit. considering. that samsung has strategic partnerships with AMD and global foundries.

  17. i still have no idea what the heck an astroturfer even is

  18. I’m pretty sure they’re not talking about GDDR5 chips, they’re talking about next-gen GPUs.

  19. Is astroturf a real wicket?

  20. Oh like that is some evidence that everything is going well? Wait for 12 quarters and see where Nvidia will be up to…. neck deep in sh*t.