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TSMC Overtakes Samsung In Global Semiconductor Sales

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TSMC, the world’s largest foundry company, has reportedly overtaken Samsung to the top spot in global semiconductor sales. The Taiwanese firm generated NTD 613 billion (approx. USD 19.3 billion ) in semiconductor sales in Q3 2022. Its South Korean rival made KRW 24-25 trillion (~USD 17.2 billion) during the same period.

According to the Korean media, Samsung’s over-reliance on memory chips has affected its semiconductor earnings this past quarter. The company’s operating profit from the semiconductor business between July to September this year was KRW 6 trillion. But more than 90 percent (over KRW 5.5 trillion) of that came from the memory segment. Application processors and other semiconductor units hardly made any money.

Samsung has long been the world’s largest vendor of memory chips. So it’s a no-brainer for the company to strengthen the business. But at the same time, it also needs to improve its other semiconductor business lines or it may end up in situations like this. With the demand for memory solutions suffering a steep decline in recent months amid global economic uncertainty, the whole semiconductor business has taken a hit.

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TSMC, meanwhile, continues to attract big semiconductor clients thanks to its superior foundry tech. Despite a slowdown in the industry and resulting price drop, the Taiwanese company saw a healthy 48 percent increase in semiconductor revenue in the third quarter of this year. This massive growth enabled it to leapfrog Samsung to the top spot.

Samsung is going through a rough patch lately

Samsung recently shared its earnings guidance for Q3 2022, estimating a massive 31 percent decline in profits from last year. It would be the company’s first annual profit decline in almost three years and the lowest since the beginning of 2021. A dip in semiconductor sales has affected its earnings the most, but the firm is going through a rough patch in other business lines too.

In the smartphone market, Samsung was expecting to sell about 15 million units of the Galaxy Z Fold 4 and Galaxy Z Flip 4 foldables combined this year. However, industry analysts believe the company may miss the target by almost 50 percent. It may only sell about eight million units of the latest foldables in 2022. The outlook isn’t great for regular smartphones as well, and other electronic products too.

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Of course, the global economic situation is partly to blame, but Samsung’s woes in the semiconductor business may have more underlying causes. Clients have lost trust in its foundry tech because of its underperforming Exynos processors. Time will tell if the company can turn things around with the launch of 3nm smartphone processors, which will be based on the new GAA (Gate-All-Around) fabrication tech.