Samsung's Foundry Market Share Declines in Q1... Gap with TSMC Widens (Comprehensive)

[Asia Economy Reporter Jeong Hyunjin] Samsung Electronics is struggling to narrow the gap with Taiwan's TSMC, the number one player in the foundry (semiconductor contract manufacturing) industry. Although it aims to become the number one in the system semiconductor sector, including foundry, by 2030, unexpected power outages followed by TSMC's aggressive investment decisions have made Samsung Electronics' progress heavier.

According to market research firm TrendForce on the 1st, Samsung Electronics' foundry revenue in the first quarter of this year was $4.108 billion (approximately 4.5537 trillion KRW), down 2% (about 76.5 billion KRW) compared to the fourth quarter of last year. Its market share in the foundry market decreased by 1 percentage point from 18% in the fourth quarter of last year to 17% in the first quarter of this year.

(Data provided by TrendForce)

TrendForce analyzed that Samsung Electronics' revenue declined due to the shutdown of its Austin plant caused by the cold wave in the U.S. last February. Samsung Electronics' semiconductor foundry plant in Austin, Texas, U.S., was unable to operate normally for over a month after power and water supply were cut off on February 16 due to a record-breaking cold wave in the U.S. The resulting loss for Samsung Electronics is estimated to be between 300 billion and 400 billion KRW.

On the other hand, TSMC recorded foundry revenue of $12.92 billion and a 55% market share in the first quarter of this year. Revenue increased by 2% compared to the previous quarter, and market share rose by 1 percentage point compared to the fourth quarter of last year. This was due to continuous foundry orders from fabless companies such as AMD and Qualcomm in the U.S.

Accordingly, the market share gap between Samsung Electronics and TSMC widened from 36 percentage points in the fourth quarter of last year to 38 percentage points in the first quarter of this year. The gap between the two companies has remained in the mid-to-high 30% range this year as well as last year. Although Samsung Electronics has poured massive funds into securing new lines and advanced processes to catch up with TSMC, TSMC has continued its investments without falling behind, maintaining its lead.

TSMC has recently raised its value further by announcing aggressive investment plans this year, such as building six advanced foundry fabs in Arizona, U.S. It stated that it would invest $30 billion this year and $100 billion over the next three years focusing on advanced processes. Additionally, the Japanese government announced yesterday that TSMC will invest 37 billion yen (approximately 37 billion KRW) in a semiconductor research hub in partnership with Japan. This shows a swift response amid the prolonged semiconductor shortage.

Samsung Electronics is facing significant challenges. It must make large-scale investments in the U.S. without a head of the group. Recently, Samsung Electronics announced it would invest 171 trillion KRW in system semiconductors, including foundry, by 2030, exceeding the initially planned 133 trillion KRW. Regarding the establishment of a U.S. foundry plant, Samsung Electronics Vice Chairman Kim Ki-nam revealed an investment plan of $17 billion at the end of last month, but the company is currently in final deliberations over incentive negotiations with Texas, Arizona, and New York as candidate sites.

This content was produced with the assistance of AI translation services.