Samsung-Baidu 2nm Chip Collaboration Faces Challenges Amid U.S.-China Tensions
Samsung’s collaboration with Baidu on a 2nm chip has stalled due to U.S.-China tensions and regulatory concerns. Originally planned for mass production in 2025, the project faces delays amid potential tariff implications and revised investment strategies. As market uncertainties persist, Samsung is exploring other partnerships while reconsidering investments in its semiconductor plants.
Samsung’s collaboration with China’s Baidu on a 2nm chip deal appears to have stalled amidst rising U.S.-China tensions. Reports from Sedaily indicate that while Baidu intended to manufacture AI chips utilizing Samsung’s 2nm process by 2025, negotiations have encountered significant roadblocks since the onset of the Trump administration. Balancing U.S. regulatory concerns with the pursuit of major clients has become increasingly complex for Samsung.
The initial ambition was to mass-produce AI accelerators for Baidu by integrating Samsung’s High Bandwidth Memory (HBM) products into the design. However, with the current stalemate on the 2nm project, both companies are reportedly seeking alternative advanced chip partnerships to continue innovation in the semiconductor space.
The withdrawal from the 2nm initiative is primarily attributed to tightening semiconductor policies initiated during Trump’s presidency, which raised the potential for chip tariffs and alterations to the CHIPS Act. Reports highlight that the Biden administration allocated $4.7 billion to Samsung under the CHIPS Act on December 20, 2024, which was lower than the anticipated $6.4 billion.
In light of ongoing market uncertainties, there are indications that Samsung may reconsider its investment strategies, potentially suspending developments at its Pyeongtaek plant in South Korea and the Taylor plant in the U.S. Reports from the Korea Economic Daily suggest that delays in the construction of the $37 billion fab in Taylor, Texas, mean production will now commence in 2026.
Additionally, with competitor TSMC committing an additional $100 billion in the U.S. market, Samsung may find itself at a disadvantage, potentially resulting in further business losses as it navigates these challenges in the semiconductor industry.
In summary, Samsung’s partnership with Baidu on the 2nm chip deal faces significant challenges due to geopolitical tensions, U.S. policy changes, and market uncertainties. The company is actively seeking alternative collaborations while reevaluating investments in critical semiconductor facilities. Given TSMC’s aggressive expansion, Samsung’s position in the competitive landscape remains precarious as it adapts to these evolving circumstances.
Original Source: www.trendforce.com
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