The dynamics of the chip market have evolved rapidly in the past few quarters. While TSMC has maintained its dominance, Samsung Foundry seems to be struggling to maintain its hold.
Samsung Foundry Struggles With Momentum In The Chip Industry as China's SMIC Catches Up To The Korean Giant
The Taiwan giant has been the industry leader in the chip segment for quite some time, part of which concerns how quickly TSMC adopts newer technologies. The foundry is the go-to place for Big Tech to satisfy their chip needs, with firms like NVIDIA, Apple, and AMD being the primary customers, driving TSMC's revenues to newer levels. On the other hand, it won't be wrong to say that competitors are slacking since they have not managed to innovate with newer processes and are also finding issues with existing nodes. Notably, Samsung Foundry now has a disappointing market share, according to a new report by TrendForce.
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Diving into what TSMC has managed to achieve, the firm held 67.6% of the chip market share in Q1 2025, which is a minor increase over Q4 2024, but they have dominated the sector. This share is a result of the company's commitment to catering to the demand coming from the AI segment and how NVIDIA and its partners are involved in a "selling spree", making deals for large-scale AI clusters and hardware. Most of the demand is NVIDIA-driven at TSMC, but some parts are also played by Apple, which has been a crucial customer of the Taiwan giant.
For now, there's no stopping TSMC, especially with how the firm is progressing with its US facilities and next-gen nodes like the N2 and A16 technology, both of which are expected to take revenue to new levels. Interestingly, once considered an arch-rival of TSMC, Samsung Foundry is now struggling to maintain its market share, since the report suggests that the firm has seen a QoQ decline, with its share dropping to 7.7%. The firm's poor performance is mainly due to its inability to deliver on past projects, and how all the demand is inclined towards TSMC.
Samsung is on track to be replaced by China's SMIC in market share, as the Chinese firm manages to achieve a QoQ increase, with share coming at 6.0%. The demand for SMIC's nodes is mainly driven by domestic firms like Huawei, especially after the company's progress with 7nm and DUV equipment. The Chinese semiconductor sector is scaling up in capabilities, given its Western counterparts' head-to-head competition.
About the author: Muhammad Zuhair is a hardware and technology reporter for Wccftech, specializing in the semiconductor industry and the complex interplay between technology, manufacturing, and geopolitics. His coverage focuses on the corporate strategies and technological roadmaps of industry giants like TSMC, NVIDIA, Samsung, and Intel. Zuhair's expertise lies in deconstructing complex topics such as fabrication nodes (e.g., 2nm process), the economic impact of policies like the CHIPS Act, and the strategic development of AI infrastructure from NVIDIA, AMD and Intel.
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