In a statement 2 years ago, Samsung explained its grand plan to become the world’s largest semiconductor brand by 2030. Last year, the company announced that it has increased its investment plan from $115 billion to $151 billion accordingly. However, things may not go as easily as he expected. Because TSMC keeps the competition tight.
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TSMC to surpass Samsung in semiconductor chip investment this year
It was said by South Korean media that TSMC will invest KRW 52.2 trillion (approximately $44 billion) in 2022 to expand its foundry business. In return, Samsung plans to invest KRW 45 trillion (approximately $37.7 billion). In 2020 and 2021, Samsung invested significantly more in its chip-making business than TSMC. But this year it lagged behind.
With strong customers such as Apple and AMD, TSMC performed much better than expected in 2021. Revenue of the Taiwanese firm increased by 24.9 percent compared to 2020 to $56.8 billion, while operating profit increased by 40.9 percent to $23.3 billion.
For this reason, the company made the right decision and used this high profit to expand its investments instead of spending it. In this way, it can gradually increase both its profit and growth rate by taking more jobs in the coming years. As such, it is considered that it will surpass Samsung this year.
In addition, industry experts believe that Samsung’s 7nm and 5nm manufacturing technologies are not as good as TSMC’s equivalent processes. In fact, even the 4nm fabrication line is expected to underperform compared to TSMC’s 4nm fabrication. So more and more customers are turning to Taiwanese company for their future products.
But Samsung plans to reverse that with its 3nm GAA (Gate-All-Around) process. It is reported that this new technology of the Korean company, the 3nm GAA process, can offer a 35 percent reduction in space and 30 percent higher performance or 50 percent lower power consumption compared to 5nm chips.
The company plans to start mass production of 3nm chips at least a month ahead of its rival. But the response from the Taiwanese company will not be delayed. Right after Samsung, in 2024, it will also implement GAA technology with its own 2nm process.
Since the beginning of the pandemic, there has been a huge increase in demands for advanced CPUs, GPUs, AI processing memory, cloud infrastructure, personal computing, and advanced mobile devices. In fact, this leads to the ongoing global chip shortage. Therefore, the semiconductor area is viewed as a high growth area. Samsung and TSMC are working harder to get a bigger share of this pie.