Samsung Electronics, which previously lagged far behind Taiwan's TSMC in the semiconductor foundry industry, is now focusing on improving its technological competitiveness and accelerating its catch-up efforts. Previously, due to low yield rates, Samsung faced challenges in the initial rollout of its advanced 3nm process, but has recently stabilized its 3nm technology and is working to narrow the gap with TSMC in 2nm processes. Industry insiders predict that as its wafer fabrication plant in Taylor, Texas, gradually increases capacity, Samsung's foundry business is expected to become profitable starting in 2027, marking the official beginning of Samsung's full-scale pursuit of TSMC.
2nm Capacity Expansion
Market research firm Counterpoint Research predicted on the 20th that Samsung's 2nm process capacity will increase by 163%, from 8,000 wafers per month in 2024 to 21,000 wafers per month by the end of next year. This capacity expansion is based on the stable yield of Samsung's 2nm process. Counterpoint Research pointed out: "As Samsung wins more customers in areas such as mobile, supercomputing, and artificial intelligence, its 2nm process advancements could be a key turning point. If yields continue to improve and mass production at the Taylor factory progresses smoothly, Samsung is expected to significantly narrow the competitive gap with TSMC in the cutting-edge process field for the first time in generations."
Currently, Samsung's 2nm process yield is estimated to have improved to 55% to 60%. This progress has successfully attracted numerous major customers to adopt its advanced process. In July of this year, Samsung signed a $16.5 billion (approximately 24.28 trillion won) contract with Tesla to produce its next-generation AI6 chip. In addition, Samsung has also secured orders for its Exynos 2600 smartphone application processor (AP) from Samsung System LSI, image sensors from Apple, and ASICs for cryptocurrency mining from Chinese companies WIFI and Canaan Technology. Qualcomm's APs are also expected to receive orders soon.
Flexible pricing strategies attract customers
According to TrendForce data, TSMC dominated the wafer foundry market in the second quarter with a 70.2% market share, while Samsung Electronics had a 7.3% market share. This gap narrowed to 30 percentage points in 2019, but has since widened again.
However, the tech industry generally believes that Samsung is capable of competing with TSMC in the 2nm process field. Samsung introduced Gate-All-Around (GAA) technology in its 3nm process, which minimizes current leakage and significantly improves performance and energy efficiency compared to traditional FinFET designs. Samsung adopted GAA technology from its 3nm process onwards, while TSMC didn't start using it until its 2nm process. An industry insider pointed out, "Samsung overcame the challenges of the 3nm process and accumulated rich experience with GAA, putting it in a completely different position compared to TSMC, which has just begun adopting this new technology."
Currently, TSMC is facing a surge in orders from major clients such as Nvidia and Apple. Reports indicate that TSMC has increased the price of its 2nm wafers by 50% compared to previous generations. This situation may benefit Samsung, which is using flexible pricing strategies to attract customers. By focusing on acquiring diversified process clients and production volumes, Samsung's foundry business has shown signs of recovery. Recently, Samsung won production contracts from US AI semiconductor startups Chabarite (4nm) and Anaphae (28nm), as well as South Korean startup DeepX (2nm). A semiconductor industry insider commented, "TSMC's focus on tech giants like Nvidia and Apple makes it difficult for them to accept new orders while raising wafer prices. This creates a niche market that Samsung can leverage."
Achieve Profit Targets
The tech industry expects Samsung's foundry business, which has been losing hundreds of billions of won each quarter for years, to return to profitability starting in 2027. This is largely attributed to anticipated capacity increases at its Austin plant and the mass production of Tesla's AI6 chip at the Taylor factory, beginning in 2027.
In its third-quarter earnings briefing, Samsung stated, "We have secured record orders focused on cutting-edge processes, including high-volume customer contracts for our 2nm process. As new products using our 2nm process enter mass production, we expect performance to improve further through continued productivity gains and cost-effective measures."
Post time: Nov-10-2025