TSMC Retains Leadership in Foundry Market Amid Samsung’s Threat from China’s SMIC in Chip Market Share

The chip market landscape has undergone significant shifts over the past few quarters, with TSMC solidifying its leadership position, while Samsung Foundry struggles to keep pace.

Samsung Foundry Faces Challenges as China’s SMIC Gains Ground

For an extended period, TSMC has emerged as the frontrunner within the chip manufacturing industry, mainly due to its swift adoption of cutting-edge technologies. This Taiwanese powerhouse has become the preferred foundry for major tech enterprises, including NVIDIA, Apple, and AMD. Their substantial patronage has propelled TSMC’s revenues to unprecedented heights. Conversely, competitors like Samsung Foundry appear to be lagging; recent analyses indicate a failure to innovate and challenges in managing existing production nodes. A report by TrendForce highlights Samsung Foundry’s diminishing market share, which raises concerns about its future in the competitive landscape.

Looking deeper into TSMC’s achievements, the company recorded a market share of 67.6% in Q1 2025, marking a slight increase from the previous quarter. This dominance is largely attributed to the surging demand from the artificial intelligence sector. NVIDIA and its partners are actively engaging in “selling sprees, ”securing substantial contracts for AI clusters and related hardware. While NVIDIA significantly drives demand at TSMC, Apple also continues to play a pivotal role as a key client.

At present, TSMC shows no signs of slowing down, particularly as it advances its US-based manufacturing facilities and develops next-generation nodes such as the N2 and A16 technologies, which are anticipated to drive future revenues even higher. In stark contrast, Samsung Foundry, once a formidable competitor to TSMC, finds itself grappling with a decline in market share, which has fallen to 7.7%.This downturn is chiefly attributed to Samsung’s struggles to fulfill past project commitments amid overwhelming demand favoring TSMC.

Moreover, in an intriguing turn of events, Chinese semiconductor company SMIC is poised to eclipse Samsung in market share. SMIC achieved a quarter-over-quarter increase, bringing its segment share to 6.0%.The growth trajectory of SMIC is largely fueled by domestic demand, prominently from companies like Huawei, which have made significant strides with 7nm technology and DUV equipment. The rapid advancements in China’s semiconductor industry further intensify competition with their Western counterparts.

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