The Tower acquisition puts Intel on the top 10 foundry list for the first time. If Intel acquires GF they could be #2.
Industry watch: Strategic moves among wafer players
The wafer foundry business is a highly concentrated industry in terms of revenue, with the top-10 players accounting for 98.4% and the top-5 for nearly 90% of global contribution ratio. It is apparent that in this capital-intensive, technology-intensive sector where tight relationships with clients are important, one could not dominate the market without multiple competitive edges.
According to DIGITIMES Research's 2021 industry statistics, TSMC's revenue reached US$56.82 billion, with a global market share of 59.5%, and an almost complete dominance in the 7nm and 5nm market segments. Samsung in second place has reported a total revenue of about US$18 billion in its System LSI division, with external orders contributing about US$8.2 billion. Samsung's aggregated revenues of non-memory businesses amount to about 1/3 of TSMC's revenues, while Samsung's wafer foundry businesses are only 14.5% of TSMC's revenues.
TSMC's capital expenditure is expected to represent 54% of revenue in 2021 and will exceed US$40 billion in 2022, while TSMC's R&D budget is usually set at 8% of revenue. Samsung may want to overtake TSMC, but its non-memory division cannot afford hefty capex or R&D expenses. Therefore, Samsung would not spin off the wafer foundry business. At some point Samsung may be able to beat TSMC in node advancements, or win over one or two customers, in general the Korean firm can barely pose a significant threat to TSMC's global leadership.
Industry watch: Strategic moves among wafer players
The wafer foundry business is a highly concentrated industry in terms of revenue, with the top-10 players accounting for 98.4% and the top-5 for nearly 90% of global contribution ratio. It is apparent that in this capital-intensive, technology-intensive sector where tight relationships with clients are important, one could not dominate the market without multiple competitive edges.
According to DIGITIMES Research's 2021 industry statistics, TSMC's revenue reached US$56.82 billion, with a global market share of 59.5%, and an almost complete dominance in the 7nm and 5nm market segments. Samsung in second place has reported a total revenue of about US$18 billion in its System LSI division, with external orders contributing about US$8.2 billion. Samsung's aggregated revenues of non-memory businesses amount to about 1/3 of TSMC's revenues, while Samsung's wafer foundry businesses are only 14.5% of TSMC's revenues.
TSMC's capital expenditure is expected to represent 54% of revenue in 2021 and will exceed US$40 billion in 2022, while TSMC's R&D budget is usually set at 8% of revenue. Samsung may want to overtake TSMC, but its non-memory division cannot afford hefty capex or R&D expenses. Therefore, Samsung would not spin off the wafer foundry business. At some point Samsung may be able to beat TSMC in node advancements, or win over one or two customers, in general the Korean firm can barely pose a significant threat to TSMC's global leadership.
Industry watch: Strategic moves among wafer players
The wafer foundry business is a highly concentrated industry in terms of revenue, with the top-10 players accounting for 98.4% and the top-5 for nearly 90% of global contribution ratio. It is apparent that in this capital-intensive, technology-intensive sector where tight relationships with...
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