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TSMC Expands Market Dominance, Leaving Samsung Foundry Behind
As the world’s largest contract chip manufacturer, TSMC continues to reinforce its dominance in the semiconductor industry. The Taiwan-based foundry boasts a prestigious list of clients including industry leaders such as Apple, Nvidia, AMD, MediaTek, Qualcomm, and Broadcom. According to a report compiled by TrendForce and released by The Chosun Daily, TSMC’s market share saw an increase of 2.4 percentage points, reaching 67.1% during the fourth quarter of 2024. This impressive figure indicates that nearly two-thirds of all chips produced in that quarter were manufactured by TSMC.
In contrast, Samsung Foundry, which occupies the second position in the market, experienced a decline in its share from 9.1% to 8.1% in the same quarter. The South Korean tech giant has faced considerable challenges, particularly concerning yield rates on its advanced semiconductor technologies. This struggle prompted Samsung to utilize Qualcomm’s Snapdragon 8 Elite as the application processor for all units of its Galaxy S25 line. If current yield rates do not improve, a similar scenario may unfold for the upcoming Galaxy S26 series, where Samsung aims to increase its 2nm production yields from only 30% before the mass production of the Exynos 2600 application processor begins. If successful, the Exynos 2600 system-on-chip (SoC) will power the Galaxy S26 and Galaxy S26+ in all regions except the U.S., China, and Canada.
The widening gap in market share between TSMC and Samsung Foundry is notable, increasing from 55.6% in Q3 to 59% in Q4, as reported by TrendForce. A big part of TSMC’s success can be attributed to the surging demand for AI-related technologies, particularly GPUs produced by Nvidia. These chips are critical for various AI applications, ranging from training to inference processes, and are exclusively manufactured by TSMC.
Additionally, TSMC benefits from robust demand for high-end smartphone components, including those that power Apple’s iPhones and Samsung’s flagship Galaxy S series along with its foldable Galaxy Z models. Notably, Google will utilize TSMC’s cutting-edge third-generation 3nm process node (N3P) for its Tensor G5 application processor, specifically designed for the Pixel 10 smartphone line. This same technology will also be leveraged to produce Qualcomm’s Snapdragon 8 Elite 2 for the forthcoming Galaxy S26 Ultra.
As for the competition, China’s largest chip manufacturer, SMIC, currently holds the third place in the foundry rankings. SMIC seems to be managing the production of application processors for Huawei while potentially reaping profits from manufacturing Huawei’s Ascend AI accelerators. However, ongoing U.S. sanctions have hindered SMIC’s ability to acquire extreme ultraviolet lithography machines, restricting the company to producing chips at a maximum process node of 7nm.
During the fourth quarter of 2024, TSMC generated revenues of $26.85 billion, marking a year-over-year growth of 14.1%. In stark contrast, Samsung Foundry’s revenue for the same period dipped by 1.4%, totaling $3.26 billion.
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