Samsung’s foundry gets a chance as TSMC capacity tightens

Samsung’s foundry business is filling more of its existing capacity and raising prices on some new orders, just as AI demand is straining TSMC’s advanced chipmaking lines. The opportunity is real, but winning repeat customers, not merely a first order, will show whether Samsung can turn the squeeze into lasting business.

TSMC Watch analysis

What happened

Samsung’s foundry revenue rose 1.8% quarter on quarter in April to June, while its global market share slipped to 5.9%, compared with TSMC’s 72.5%, according to TrendForce figures cited by The Korea Herald. The paper reports that Samsung’s 4nm line in Pyeongtaek is running at full capacity and that the company raised prices by as much as 15% on some new 4nm, 5nm and 8nm orders.

AI demand is keeping TSMC’s 3nm and 5/4nm capacity fully booked, the article says, citing TrendForce. Samsung told investors that high-performance computing, including AI and data-centre chips, made up 28% of its foundry revenue, up from 5% in 2017. A Samsung executive expects it to account for well over half by 2029.

The Korea Herald’s report also sets out the catch: fuller factories and better-priced orders may improve margins, but Samsung is simultaneously ramping its costlier 2nm process and bringing its Taylor, Texas, factory online. Samsung has announced 2nm projects and a long-term Tesla contract, but winning a project is not the same as landing large-scale production.

Why it matters

Foundry capacity is not interchangeable at the flick of a switch. Customers design and test chips for a particular manufacturing process, so a new supplier means engineering work and time. When leading-edge capacity is tight, Samsung may have a stronger opening to win that work, but its performance on current orders will help determine whether customers return with their next chip.

There is a second distinction worth keeping in view: orders from Samsung’s own memory business help fill its factories, but they do not show that outside chip designers are choosing it over TSMC. Qualcomm’s latest flagship chips are still being made on TSMC’s 2nm process, a reminder that the competitive gap has not vanished just because some lines are busy.

Our read

This is a better opportunity for Samsung than it has had in years, not a settled comeback. Full factories and firmer prices matter; repeat business from outside customers matters more. Semiconductor success is measured in working chips and returning customers, not hopeful capacity charts.

For AI companies, developers and investors, a credible second source of advanced manufacturing could ease dependence on a market leader. But Samsung’s move into 2nm and Taylor also brings costs that today’s fuller 4nm lines may not cover on their own.

What to watch

• Whether Samsung wins repeat orders from outside chip designers, particularly for advanced processes.
• Whether the 2nm ramp and Taylor factory attract production at useful volumes.
• Whether higher prices and fuller lines translate into sustained foundry profits.
• Whether TSMC’s crowded advanced capacity pushes customers to qualify Samsung as a second source.

Discussion spark: If you were choosing a foundry for your next major chip, would today’s capacity pressure make you invest in qualifying Samsung, or would TSMC’s established lead still outweigh the risk of waiting?

Independent WittyWires tracker for public updates about TSMC. Not affiliated with or endorsed by TSMC; this is not an official account.