Samsung Electronics' (005930.KS) foundry division is rapidly breaking through its yield barrier. The yield on Nvidia's Grok3 — an artificial intelligence inference accelerator (LPX) built on a 4-nanometer foundry process — has improved by roughly two to three times from the second quarter of this year.
Samsung Foundry, which once struggled to win large customers because of low yields, is now moving into a profitable phase where it secures both productivity and profitability at leading-edge nodes, analysts said.
Nvidia offered its own endorsement. At the semiconductor conference Hot Chips 2026, held in California, Nvidia announced that the Grok3 LPX had entered full-scale mass production.
Its performance is also world-class. In benchmarks released by Nvidia, the Grok3 processed a context of 100,000 tokens — the smallest unit of text an AI handles — on Google's Gemma4 31B model while generating 3,400 output tokens per second. That was the fastest speed recorded on the model, and its response performance was up to four times higher than competing platforms.
The chip is made at Samsung Electronics' Pyeongtaek campus. The Grok3 is produced on the 4nm process at the Pyeongtaek S5 foundry line. Nvidia Chief Executive Jensen Huang unveiled the partnership between the two companies directly at GTC 2026 in March, saying, "Samsung is building Grok3." Samsung Electronics also displayed a Grok3 wafer at the venue at the time.
The key change has taken place on the manufacturing floor. According to industry sources, the Grok3's production yield is estimated to have improved by two to three times compared with April of this year. It is now believed to have climbed above 80%, a level the industry generally regards as sufficient for stable mass production.
Semiconductor yield refers to the proportion of properly functioning chips from a single wafer. When yield is low, fewer chips can be sold from the same wafer input, causing costs to rise sharply. Conversely, once yield exceeds a certain level, a foundry can absorb large customer orders while still turning a profit. This is why yield is considered a core metric that reflects both technological capability and profitability in the advanced foundry business.
Behind Samsung's yield normalization is the rapid maturing of its 4nm process. Samsung Electronics has accumulated mass-production experience by manufacturing the "base die" for its sixth-generation high-bandwidth memory (HBM4) on a 4nm process in the same family. As it built up know-how in reducing process variability and raising the share of good units, production stability improved even for large chips from external AI customers such as the Grok3, according to the analysis.
The pace at which its plants are filling up has also changed. In its second-quarter earnings announcement, Samsung Electronics said its leading-edge processes of 8nm and below had effectively entered full operation. Where Samsung Foundry's biggest worry used to be empty production lines and low yields, at leading-edge nodes the situation is now shifting to one in which customer demand outpaces the rate at which capacity is being expanded.
The center of gravity in the foundry business is also moving from mobile to AI. Samsung Foundry expects the share of revenue tied to AI and high-performance computing to rise from the high 10% range last year to more than 30% this year. In the second half, the share of leading-edge process revenue is also expected to exceed half of total foundry sales.
The mood is changing at 2nm as well. Samsung Electronics has secured 2nm projects from a large cloud service provider and from AI and high-performance computing customers, and has entered the design stage. The number of 2nm orders won this year is expected to more than double from last year.
Backed by improvements in yield and utilization, its pricing power is also strengthening. Samsung Electronics is reported to have recently raised prices on new 4nm orders for U.S. and Chinese customers by up to 15%. This means the company is beginning to move away from a phase in which it offered low prices to secure volume, toward a structure in which it can select more profitable orders.
An industry official said, "In the foundry business, yield ultimately has to rise for customers to increase volume and for pricing power to emerge," adding, "The fact that utilization and yield are improving at the same time, led by AI customers, is a sign that the business structure of Samsung Foundry is changing from what it was in the past."
