Taiwan's TSMC still leads chipmaking sector despite achievements by Samsung

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Samsung recently became first in world to release 3nm chips, but production could be smaller in scale

www.taiwannews.com.tw, Jul. 12, 2022 – 

TAIPEI (Taiwan News) – Taiwan Semiconductor Manufacturing Co. (TSMC) still maintains a dominant position in the contract chipmaking segment despite Samsung Electronics saying three years ago that it would become the world's number one foundry.

Samsung made a splash on June 30 when it said that it had begun volume production of its 3nm chips, the first chipmaker in the world to do so. However, as Nikkei pointed out, Samsung has not yet announced any customers for its 3nm silicon.

The report also noted that 3nm production is not initially occurring at Samsung's Pyeongtaek fab, where its newest equipment is being installed, but rather at its Hwaseong plants, where it develops manufacturing technology. This has led some to speculate that initial 3nm production could be smaller in scale, Nikkei said.

Sources told Nikkei that Chinese cryptocurrency miners are expected to be Samsung's first clients for its 3nm semiconductors. However, due to the volatility of the crypto sector, it's unclear how long-term these miners will be.

Samsung's foundry division has been having production issues since the start of 2021 when it was unable to increase yields for its 5nm chips. This caused its biggest client, Qualcomm, to outsource more production to TSMC at the expense of Samsung.

Meanwhile, TSMC is expected to launch its 3nm chips by the end of this year, with production taking place at fabs in Tainan and Hsinchu, Nikkei noted.

TSMC has several advantages over its Korean rival that makes it attractive to clients like Apple. Namely, TSMC is not a direct competitor in the smartphone segment like Samsung, so it's easier for clients such as Apple to trust TSMC with its proprietary chip designs. The Taiwanese chipmaker also has a unique lineup of off-the-shelf design data that complements a customer's chip designs, according to Nikkei.

To try and catch up with TSMC, Samsung has recently replaced several executives. Kyung Kye-hyun, previously the CEO of Samsung Electro-Mechanics, was named the head of Samsung's chipmaking Device Solutions department last December, while last month the company replaced around a dozen senior managers, including the head of the foundry manufacturing technology center, the report said.

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