Samsung Sees More Chipmaking Requests as TSMC Capacity Tightens

Samsung is seeing more requests for chipmaking services from big global tech giants. The increase comes as TSMC is suffering from tight production capacity for its cutting-edge chip nodes. This could boost the Korean foundry’s struggling business in the coming year.

Samsung emerges as an alternative option in the global chip supply chain

According to a report from Nikkei Asia, Samsung Foundry has seen a surge in inquiries from existing and potential global customers. The clients seek to use the Korean firm’s advanced chip manufacturing capacity. Google is considering using Samsung to make its next-gen Axion chips and parts of its AI Tensor Processing Units (TPUs), possibly as early as 2028.

Meanwhile, BYD, China’s leading EV maker, is in discussions with Samsung regarding its future autonomous-driving chips. AMD is considering building future CPUs with Samsung from 2028. The Korean foundry already makes Nvidia’s Groq language processing units (LPUs).

Moreover, Tesla works with Samsung (alongside TSMC) for its AI5 chips, which power autonomous vehicles and humanoid robots. The Korean firm will also make the car maker’s AI6 chips in Texas, and the contract value may increase further from the original $16.5 billion. Customers are leaning toward Samsung due to capacity constraints at TSMC, the leader in the global foundry market.

“Samsung’s yields still lag behind TSMC’s, but capacity availability has made it an increasingly attractive option,” said an executive from a Chinese autochip designer. Moreover, some US clients are also using multiple contract chipmakers when possible due to geopolitical factors.

If Samsung continues to see increasing requests for advanced chip production, this will be a big win for its foundry business. The company has been struggling to earn profits for many years despite being the world’s second-largest foundry.

In fact, the gap with industry leader TSMC is massive in terms of revenue and market share. While it will not be easy for Samsung to catch up with the Taiwanese foundry, it could still make its chipmaking services profitable in the coming years.