TSMC's 2-Nanometer Sold Out; Samsung Foundry Gains

[Daniel Nenni]

Samsung secures Tesla, NVIDIA orders as TSMC faces AI-driven demand surge with 72% market dominance

TSMC, the world’s largest foundry (semiconductor contract manufacturer), has seen a surge in orders from big tech companies, with its cutting-edge process capacity for 2028 effectively sold out. This has led to analysis suggesting that Samsung Electronics’ foundry business, as an alternative to TSMC, could gain opportunities.

According to Taiwan’s Economic Daily and other sources on the 20th, TSMC’s 2-nanometer (1 nanometer is one-billionth of a meter) process has been fully booked until 2028 due to overwhelming demand from major tech firms like NVIDIA, AMD, Qualcomm, and Apple, which are prioritizing TSMC’s 2-nanometer process for their latest AI chips. While TSMC is aggressively expanding production lines worldwide, including in the U.S. and Japan, it remains insufficient to meet AI-driven demand. Even TSMC’s fourth Arizona plant, slated for mass production in 2030 and set to specialize in sub-2-nanometer processes, has already been fully reserved before construction began. Demand is expected to surge further as companies like Google and Amazon develop custom chips alongside existing AI chipmakers such as NVIDIA and AMD.

TSMC’s production limitations are seen as an opportunity for Samsung Electronics. As of the fourth quarter of last year, TSMC held a dominant 72% global foundry market share, while Samsung Electronics trailed at 7%. However, only TSMC and Samsung Electronics can produce cutting-edge 2-nanometer processes. This positions Samsung as a viable alternative for big tech. Recently, Samsung has secured consecutive orders from Tesla and NVIDIA. It also plans to target big tech clients through its factory under construction in Taylor, Texas. Consequently, there are forecasts that Samsung’s foundry division, which has faced years of losses, could turn profitable this year.

A key challenge for Samsung is achieving stable yield rates (proportion of good products) in advanced processes to build customer trust. A source from the semiconductor industry stated, “To move beyond being an alternative and become a primary choice by capitalizing on TSMC’s weaknesses, Samsung will ultimately need to prove its technological capabilities.”

TSMC's 2-Nanometer Sold Out; Samsung Foundry Gains

TSMCs 2-Nanometer Sold Out; Samsung Foundry Gains Samsung secures Tesla, NVIDIA orders as TSMC faces AI-driven demand surge with 72% market dominance

www.chosun.com

 

[Daniel Nenni]

When I want accurate TSMC utilization numbers I go to the Korean media, absolutely.

The TSMC Tech Symposium is next month. I predict we will hear: Capacity is tight... like we have heard many times before because that is a powerful position to negotiate wafer price from. Never will you ever hear CC Wei say that TSMC has more capacity than they need then ask for a wafer price increase.

In fact, COVID was the only time that we actually ran out of wafers during the FinFET era because we actually ran out of wafers. That was short lived however as TSMC increased utilization to 110% working the fab lines 24/7 and not taking equipment down for scheduled maintenance to catch up with the flood of COVID inspired wafer re orders.

But sure, go for the clicks and say the sky is falling. No one seems to notice that they have said the sky is falling many times before yet here we are. You should also know that lemmings don't follow each other off cliffs. Like TSMC running out of N2 wafers, it is a myth. Lemmings don’t jump off cliffs on purpose, they’re just small rodents migrating, and sometimes accidents happen.