TSMC's market share increased from 72.3% in the first quarter to 72.5% in the second quarter, an increase of 0.2 percentage points; while Samsung's market share fell to 5.9%. (Reuters)
[Financial Channel/Comprehensive Report] Korean media reported on Wednesday (16th) that although the global wafer foundry market reached an all-time high in the second quarter, driven by demand for artificial intelligence (AI) semiconductors, the market share gap between TSMC and Samsung Electronics has further widened.
Business Korea reported that TSMC’s market share increased from 72.3% in the first quarter to 72.5% in the second quarter, an increase of 0.2 percentage points; while Samsung’s market share fell to 5.9%. At the same time, global foundry revenue hit a record high in the second quarter. As demand for artificial intelligence soars, TSMC expands its foundry lead.
According to industry insiders on September 16, TSMC’s comprehensive revenue in August was NT$514.81 billion, an annual increase of 53.3% and a quarterly increase of 10.1%, setting a new monthly revenue high in history. This is mainly due to the growth in demand for artificial intelligence accelerators and independently designed semiconductors by large technology companies, which has led to an increase in orders for advanced processes.
Driven by the demand for artificial intelligence, the global wafer foundry market is also showing rapid growth. According to data from market research company TrendForce, the total revenue of the world's top ten foundry companies reached a record high of US$53.49 billion in the second quarter of this year, an increase of 11.5% from the previous quarter.
However, market growth trends show concentration towards TSMC. TSMC's market share increased from 72.3% in the first quarter to 72.5% in the second quarter, an increase of 0.2 percentage points, and it was firmly in the lead in the first quarter.
Samsung foundry maintained its second position, but its market share fell by 0.6 percentage points during the same period, from 6.5% to 5.9%. As a result, the gap between the top two companies in terms of market share, TSMC and Samsung Electronics, widened by 0.8 percentage points from the previous quarter.
TSMC has consolidated its dominant position in the advanced process field centered on 3nm and 5nm, while Samsung Electronics is striving to restore performance in the second half of the year. Its main strategies include the full commissioning of 4nm production lines, price increases, and improvements in 2nm process yield.
TSMC is continuing to expand its revenue sources from advanced processes. In the second quarter of this year, 3-nanometer and 5-nanometer processes accounted for 30% and 33% of TSMC's wafer revenue respectively, totaling 63%. 2nm, which started mass production in the fourth quarter of last year, also contributed 3% of wafer revenue in the second quarter of this year and began to really contribute to revenue.
As TSMC plans to rapidly expand its 2nm process capacity in the second half of the year, its revenue structure centered on advanced processes is expected to further strengthen.
Samsung Electronics is currently working to resume its foundry business with the 4-nanometer process as its core. According to TrendForce data, Samsung Electronics’ wafer foundry revenue in the second quarter of this year was approximately US$3.26 billion, an increase of 1.8% from the previous quarter. As the demand for semiconductor products and HBM substrates from external customers such as Qualcomm continues to grow, the 4-nanometer production line in Pyeongtaek has basically reached full capacity.
The recovery in demand has also led to higher sales prices. According to industry insiders, Samsung Electronics increased the price of new orders for chips produced using the 4-nanometer process (SF4) in July. It is reported that the price increase for customers in the United States and China is between 10% and 15%, and the price increase for Taiwanese customers is between 5% and 10%. According to reports, the price of 5-nanometer wafers has also increased by 10% to 15%, and the price of 8-nanometer wafers has increased by about 10%.
The key to Samsung Electronics’ mid- to long-term counterattack in its foundry business lies in the 2-nanometer GAA (Gate-All-Around) process. Samsung Electronics expects the number of orders for its 2nm process this year to more than double last year. As product design work for large-scale artificial intelligence and high-performance computing (HPC) customers has begun, the company plans to expand mass production of new mobile products using the second-generation 2nm process in the second half of the year.
It is expected that stabilizing the yield rate of the 2nm process and converting new orders into actual mass production revenue in the future will be crucial to narrowing the market share gap with TSMC. Kim Dong-won (transliteration), head of KB Securities Research Center, said: "Samsung Electronics' wafer foundry has stabilized the yield rate of the 4-nanometer process at more than 80%, and the yield rate of its 2-nanometer GAA process is also rapidly increasing to more than 70%."
