TSMC, SMIC, and GlobalFoundries, among other corporations worldwide, are expected to make aggressive investments in facilities this year. In addition to equipment investments, investments in next-generation core technologies such as advanced packaging and silicon photonics are also expected to proceed. On the other hand, Samsung Electronics is focusing on cost reduction due to continued losses in its foundry business, raising concerns that its market share may shrink.
According to the industry on the 4th, the world's largest foundry corporation, TSMC, along with China's largest foundry corporation, SMIC, and the U.S. GlobalFoundries, are predicted to significantly increase their facility investments or maintain similar levels compared to last year. In contrast, Samsung Electronics is reported to execute its foundry-related investments at less than 5 trillion won, which is more than half of last year's amount.
According to market research firm TrendForce, as of the third quarter of last year, TSMC held a foundry market share of 64.3%, SMIC 6%, and GlobalFoundries 4.8%, ranking first, third, and fifth respectively. Samsung Electronics recorded its lowest market share at 9.3% since the foundry market share tally began in 2021.
TSMC is expected to make facility investments worth between $34 billion and $38 billion (approximately 47 trillion to 53 trillion won) this year. The strategy includes increasing investments in packaging, essential for artificial intelligence semiconductor manufacturing, as well as advanced microprocessing below 3 NANO (nanometers, one billionth of a meter) to widen the gap with competitors. There are also analyses suggesting that this will exceed last year's record-high facility investment amount of $36.29 billion.
SMIC also plans to continue significant facility investments, bolstered by government subsidies and booming domestic demand. Baek Seung-hye, a researcher at Hana Securities, noted, "This year, Chinese semiconductor corporations such as SMIC are expected to execute high levels of investments and expansions to increase production capacity." Last year, SMIC experienced rapid growth in sales due to domestic fabless semiconductor design companies' demand for semiconductor manufacturing, and it is estimated to have executed facility investments of about $7.5 billion (approximately 11 trillion won).
Unlike last year when GlobalFoundries cut investments by nearly 60% compared to the previous year, this year, it plans to start construction of a new factory in New York, investing about 17 trillion won to expand production capacity. GlobalFoundries, which has focused on legacy semiconductor manufacturing, will invest about 1 trillion won in research and development for advanced packaging and next-generation optical semiconductor technology known as silicon photonics. The company intends to use the $1.5 billion (approximately 2.04 trillion won) subsidy it will receive under the U.S. semiconductor law starting this year as funding for facility investments.
An official in the semiconductor industry said, "Samsung's foundry used to invest boldly to close the gap with TSMC. Now, it is struggling with weak customer orders and is unable to make massive facility investments, which is the reality," adding, "The continuous expansion of investments by competitors could be a threatening factor in the market."
Meanwhile, Intel's pursuit to become the world's second-largest foundry, surpassing Samsung Electronics by 2030, is also significant. David Zinsner, Chief Financial Officer (CFO) of Intel, noted during a performance announcement on the 30th of last month (local time) that "Intel Foundry's annual revenue is $18 billion (approximately 26 trillion won), ranking it as the second largest globally."