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Taiwan’s TSMC looks to maintain lead over Samsung with $44 billion CAPEX

TSMC controlled 53.1% of global foundry market in Q3 2021, Samsung 17.1%

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TSMC Tainan office building (Reuters photo)

TSMC Tainan office building (Reuters photo)

TAIPEI (Taiwan News) — Taiwan Semiconductor Manufacturing Co. (TSMC) announced last week it intends to spend between US$40 billion (NT$1.1 trillion) to US$44 billion in capital expenditure for 2022 as it looks to maintain its leading position within the industry.

TSMC’s proposed investment presents a significant challenge to Samsung Electronics and its goal of becoming the top foundry player by 2030, according to The Korea Herald. In 2021, Samsung spent approximately US$33.5 billion on memory, foundry, and infrastructure investments, while TSMC intends to spend about US$44 billion this year “solely for the foundry business,” The Korea Herald cited Lee Seung-woo, an analyst for Eugene Investment Securities, as saying.

“As the foundry business requires a tremendous amount of investment, under the current business structure it would be difficult for Samsung to catch up with TSMC,” Lee added. The report estimated that Samsung will spend around US$37.8 billion on chip investments this year.

As TSMC continues to pour money into its CAPEX, its lead over Samsung is only expected to grow, according to the report. Data from TrendForce showed that TSMC controlled 53.1% of the global foundry market in Q3 last year, while Samsung trailed in second with a 17.1% share.

While Samsung at this point cannot compete with TSMC in terms of scale, it is instead focusing on taking the lead in terms of advanced chips. Samsung is planning on having its latest 3nm chips ready for mass production in the first half of 2022, while TSMC’s 3nm silicon will not be ready for commercial production until the second half of this year, per the report.

Samsung is also going to be the first to introduce gate-all-around (GAA) technology with its 3nm chips, while TSMC will not be using GAA until it releases its 2nm chips, which are slated to be ready for volume production in 2024.

However, while Samsung may be able to beat TSMC by being first to market with its latest cutting-edge chips, it could face difficulties in terms of capacity, which could prevent TSMC customers from switching to the South Korean company.