Samsung Electronics faces off against TSMC (Taiwan Semiconductor Manufacturing Company) as recent indications point to Samsung ramping up its research and development endeavors in the 2-nanometer fabrication realm, aiming to position itself for a potential turnaround as Samsung takes on the colossal and dominant TSMC by placing a strong emphasis on embracing cutting-edge technology instead of simply expanding its 3-nanometer production.
This strategic move comes on the heels of a bold statement by Kye Hyun Kyung, the head of Samsung's Semiconductor and Device Solutions (DS) division, who predicts that Samsung will outpace TSMC and other industry giants within the next five years.
According to insider information cited by South Korean news source Money Today, Samsung's semiconductor foundry division is making swift strides in advancing its 2-nanometer production initiatives. Some even speculate internally that Samsung could potentially skip over extensive 3-nanometer production and make a direct leap into 2-nanometer fabrication processes.
Although Samsung was the first to announce its 3-nanometer fabrication process, industry experts have noted that the company's share of the overall foundry capacity remains modest. This is primarily attributed to dwindling demand for semiconductor foundries amid a global economic downturn. Even with an economic recovery in 2024 on the horizon, industry projections suggest that 2-nanometer fabrication technologies will take center stage by 2025, sparking Samsung's determination to establish a strong presence in the 2-nanometer market.
TSMC, with its well-established operations and extensive production capacity, currently holds a dominant position in the semiconductor foundry market. A recent report by TrendForce Corp revealed that the company has surpassed a 60% market share of the global foundry market in Q1 2023. In contrast, Samsung faces a formidable challenge when directly competing with TSMC as it is vital for Samsung to establish its distinctiveness through advanced technology. Samsung's potential for a turnaround hinges on showcasing its technological expertise in advanced fabrication processes, a move that will ultimately enhance customer retention.
South Korean media outlet Chosun Biz previously suggested that both Samsung and TSMC were experiencing yield rates of approximately 50-60% for their 3-nanometer fabrication processes. Sources from the semiconductor industry suggest that TSMC is diligently working to ensure stable production capacity, while Samsung aims to focus on the development of next-generation advanced processes. The South Korean company is striving to attract customers by providing early production access, potentially influencing product launch schedules, and boosting the chances of clients selecting Samsung as their manufacturing partner.
Samsung commenced the use of Gate-All-Around (GAA) technology, the most advanced technology at the time when it started 3-nanometer production in June 2022. In contrast, TSMC plans to implement GAA technology starting from the 2-nanometer fabrication process. South Korean industry insiders suggest that with Samsung's experience in GAA process production, the company stands a chance of gaining an upper hand in the 2-nanometer technology competition. In 2019, Handel Jones from International Business Strategies stated that Samsung was ahead of TSMC in GAA tech by approximately 12 months. More recently, Samsung Semiconductor CEO Kye Hyun Kyung confidently declared that GAA pioneer Samsung is primed to lead in the 2-nanometer production arena.
