Samsung-TSMC, which is investing in the highest level of investment this year… Foundry competition intensifies

As Samsung Electronics and TSMC, a Taiwanese foundry company, decided to make large-scale investments, competition for semiconductors is intensifying.

According to IC Insights, a global market research company on the 18th, this year, Samsung Electronics and TSMC are expected to account for 43% of global semiconductor facility investment.

It is predicted that Samsung Electronics’ semiconductor facility investment will amount to 28 billion dollars, similar to last year, and TSMC is expected to invest less than 27.5 billion dollars. Samsung Electronics continues to invest in the semiconductor field to solidify its existing No. 1 position in memory semiconductors, as well as to accelerate the achievement of global No. 1 system semiconductor by 2030.

Vice Chairman Kim Ki-nam of the Device Solutions (DS) division made it clear that the system semiconductor business will continue the success story through technological prowess and market diversification at the regular shareholders’ meeting held the day before.

When asked about competition with TSMC, Vice Chairman Kim Ki-nam said, “It is true that the foundry business is short of the market share, production capacity, and number of customers than the leading company (TMSC),” he said. This will close the gap in competition.”

Samsung Electronics is solidifying its global No. 1 position in the global memory semiconductor market, but its foundry has a large gap with TSMC. According to Trend Force, a Taiwanese market research firm, TSMC is expected to rank first with 56% of the estimated market share in the first quarter of this year, while Samsung Electronics is expected to take the second place with 18%. UMC and Global Foundry followed with 7% each, and SMIC, which is subject to US sanctions, is expected to show 5%.

Accordingly, Samsung Electronics is about to start construction of the 3rd line in Pyeongtaek and a large-scale investment decision in Austin, USA. Pyeongtaek Line 3 is about to be fully framed, and the investment is expected to exceed 30 trillion won. The establishment of a new semiconductor plant in the US is also under consideration. Samsung Electronics is currently investing in Arizona and New York, including Austin, Texas, and it is estimated that about 19 trillion won will be invested.

In January, TSMC announced in its fourth quarter earnings announcement that this year’s capex will reach 25 billion to 28 billion dollars (about 27 to 31 trillion won).

This is a level that far exceeds the market estimate, and he said that 80% of the facility investment will be used for the ultra-fine front-end process. It is analyzed that this is due to the large increase in orders from Apple, AMD, Nvidia, and Qualcomm in the ultra-fine process below 5 nanometers.

TSMC also plans to build six foundry plants in Arizona. A total of $36 billion will be invested and production is aimed at 2024. Also, mass production of 3-nano products in the second half of this year is putting a rein in securing market position.

This drastic investment decision between the two companies is also affecting the expectations of the semiconductor market’s supercycle. In particular, the foundry market is expected to show steep growth this year.

This year, the global foundry market is worth $73.38 billion (about $81.18 trillion), an increase of about 8.4% from last year ($68.1 billion). Subsequently, it is expected to continue to grow, such as 87.3 billion dollars in 2022, 87.3 billion dollars in 2023, and 94.4 billion dollars in 2024.

This growth is partly due to the fact that IT companies are working on their own semiconductor design. Last year, the fabless market reached 142 trillion won, which accounts for 32.9% of the total semiconductor market. Accordingly, the importance of the foundry is expected to increase.