The global semiconductor foundry market is witnessing intensified competition as Samsung Electronics attempts to break TSMC's stronghold. However, reality paints a challenging picture: Samsung's foundry business continues to face significant losses while its market share remains far behind its rival. Can Samsung stage a remarkable comeback against these daunting challenges?
Samsung's Strategic Hire: Former TSMC Executive Margaret Han
In a major strategic move, Samsung Electronics has recruited semiconductor veteran Margaret Han from TSMC to lead its North American foundry operations. Industry analysts view this as a critical step to strengthen Samsung's capability to serve U.S. clients and enhance its competitiveness in the North American market, while also advancing its "Made in America" strategy.
Han brings over two decades of semiconductor industry experience to Samsung. She spent 21 years at TSMC, gaining comprehensive knowledge of all aspects of wafer fabrication. Following her tenure at TSMC, she held key positions at Intel and NXP Semiconductors, accumulating extensive industry connections and management expertise. Samsung successfully brought this seasoned executive on board in March.
Mission Critical: Securing North American Clients and Supporting Taylor Fab
Han faces a crucial mission: helping Samsung capture North American foundry orders, particularly from major players in AI and advanced process technologies like Nvidia, AMD, Tesla, and Amazon. These clients represent the most coveted segment of the foundry market, with massive order volumes and demanding technical requirements.
Additionally, Han will play a pivotal role in preparing Samsung's Taylor Fab in Texas for future operations. This facility represents one of Samsung's most significant U.S. investments and is expected to produce cutting-edge chips. Successfully attracting North American clients would ensure stable utilization rates for the Taylor plant, potentially delivering substantial revenue for Samsung.
Samsung's Foundry Challenges: Yield Rates and Market Share
While Samsung maintains strong capabilities in memory chips, its foundry business faces multiple obstacles. Recent data shows Samsung holding just 8.2% of the global foundry market share in Q4 2024, while TSMC dominates with 67.1%.
More concerning is Samsung's foundry division's financial performance. The unit reported operating losses exceeding 2 trillion won ($14 billion) in Q4 2024, with annual losses surpassing 4 trillion won. These figures indicate Samsung has invested heavily in foundry operations without achieving proportional returns.
Yield rates present another major challenge. While Samsung has made progress with its 7nm and 8nm processes—securing orders from clients like Nintendo and improving capacity utilization—its advanced nodes struggle. The company's 3nm process achieves just 50% yield compared to TSMC's 90%, causing Samsung to lose key clients to its Taiwanese rival.
"Shell-First" Strategy Under Pressure
Samsung's "Shell-First" strategy—building fabrication plants before securing clients—faces difficulties due to insufficient customer acquisition. This approach aimed to rapidly expand capacity and capture market share, but risks creating excess capacity if client demand doesn't materialize.
Facing these challenges, Samsung is conducting a thorough review of its foundry operations. The business represents a cornerstone of Executive Chairman Lee Jae-yong's long-term growth strategy, intended to transform Samsung into a comprehensive semiconductor powerhouse capable of competing in all market segments.
Can Samsung Stage a Comeback?
The recruitment of Margaret Han marks a significant step in Samsung's foundry ambitions. However, reversing current trends and gaining ground in North America will require overcoming multiple obstacles beyond yield rates and market share, including client relationships, talent retention, and supply chain management.
As competition intensifies in the global foundry market, the semiconductor industry watches closely to see whether Samsung can achieve its ambitious growth targets and emerge as a true competitor to TSMC's dominance.