TSMC and Samsung have long been the two biggest contract chip manufacturers in the world. But the latter has always played second fiddle to the former in this space. It aims to change that by 2030 with huge investments but it appears TSMC is all prepared to thwart the Korean giant’s efforts. According to a new report from The Korea Herald, the Taiwanese chip giant is planning an investment of more than 52 trillion won (roughly $43.7 billion) this year to consolidate its top position in the contract chip manufacturing market. Samsung’s investments in the chip business in 2022 may not top 45 trillion won (~$37.8 billion).
TSMC to out-invest Samsung in the chip business in 2022
Samsung announced its ten-year plan of becoming the largest chip manufacturers in the world in April 2019. The company planned to invest a whopping $116 billion in the chip business by 2030. It last year raised the investment target by around 30 percent to $151 billion. The Korean giant also appeared to be on track to achieve its goals by outpacing TSMC in chip investment for two consecutive years. It invested 32.9 trillion won (~$27.7 billion) in 2020 and 40 trillion won (~$33.6 billion) in 2021 in the chip business. That’s far more than TSMC’s investments of 18.4 trillion won and 35.6 trillion won in the same period.
However, TSMC is not letting Samsung gain an advantage with continuous higher investments. It is fighting back this year with bigger investments to make life difficult for the Korean firm’s chip business. This year’s investment should help TSMC widen the gap up top. The Taiwanese firm had a 53.1 percent share of the global foundry market in Q3 2021. Samsung distantly followed it with a 17.1 percent share.
TSMC also had a strong 2021 financially. Its revenue increased 24.9 percent from 2021 to $56.8 billion. The company also registered a 40.9 percent annual increase in operating profit, reaching $23.2 billion. It is looking to further build on that growth this year.
“As the foundry business requires a tremendous amount of investment, under the current business structure it would be difficult for Samsung to catch up with TSMC,” said Lee Seung-woo, an analyst at Eugene Investment Securities.
TSMC’s chip technology is also considered superior to Samsung’s, particularly the 7nm and 5nm process nodes. This isn’t helping the latter’s cause as most big companies are looking to TSMC for their future products. Samsung is looking to fight back with its 3nm tech this year, which will use gate-all-around, or GAA process, something TSMC may only move to with its 2nm chips next year. But the Korean giant still faces an uphill task in its aim of becoming the world’s biggest semiconductor company by 2030.