Concerns are growing about industrial risk as the global semiconductor supply chain becomes excessively concentrated in Taiwan. In the foundry (contract chip manufacturing) market in particular, TSMC's share has surpassed 70%, while Samsung Electronics remains in the 7% range, widening the gap between the two companies to more than 60 percentage points (P). Analysts say the structure that ties a significant portion of advanced chip production to Taiwan is becoming entrenched.
◇ TSMC-Samsung gap at 63 percentage points… is a “solo run” taking hold?
According to market research firm TrendForce on the 16th, TSMC's foundry market share in the fourth quarter of last year reached 70.4%. By contrast, No. 2 Samsung Electronics' share stood at 7.2%. The gap between the two companies was 63.2 percentage points, the largest on record.
The gap is even clearer in advanced nodes. The industry estimates that more than 90% of advanced logic chips at 5-nanometer (nm) and below are produced in Taiwan. Core chips used in graphics processing units (GPUs) for artificial intelligence (AI) servers, smartphone application processors (APs), and military systems are mostly manufactured at these nodes.
An industry official said, "TSMC has risen beyond a simple manufacturer to a position where it effectively sets process standards and prices."
◇ U.S. treasury secretary: “Taiwan is the ‘single point of failure’ for the global economy”
Experts say the growth of the AI industry is further intensifying the concentration of the supply chain. Mateo Valero, director of the Barcelona Supercomputing Center, said, "Taiwan's foundry model has become the foundation for chip design companies around the world," and noted, "As the AI era deepens, Taiwan's role as a technology hub will become even more important."
Global policymakers are also issuing warnings about the supply chain's concentration. Scott Bessent, the U.S. treasury secretary, said at the Davos forum earlier this year that "the biggest single point of failure in the world economy is the fact that more than 90% of advanced chips are concentrated in Taiwan, a single region," pointing to the risks of a concentrated supply chain.
TSMC's influence is also evident in its earnings structure. The company posted a gross margin of 62.3% in the fourth quarter of last year. Analysts say concentrated orders for advanced nodes amid growing demand for AI Semiconductor chips have given it strong pricing power.
◇ TSMC to expand investment by 73 trillion won, aiming to cement an “ultra-gap”… infrastructure burden remains a variable
TSMC is reportedly planning to expand 2026 capital expenditures (CAPEX) to as much as $55 billion (about 73 trillion won). In addition to investments in advanced nodes, it aims to sharply increase capacity for CoWoS (chip on wafer on substrate) packaging, identified as a bottleneck in AI chip production.
However, critics say this structure heightens global supply chain risk. As digital infrastructure relies excessively on production capacity in a specific region, natural disasters in Taiwan or power issues could deliver a direct shock across the global IT industry.
Within Taiwan, infrastructure strains are also mounting. TSMC currently consumes about 9% of Taiwan's total electricity, and that is expected to rise to around 12% by 2030 as advanced nodes expand. Water shortages and a lack of specialized semiconductor talent are also cited as long-term risk factors for the industry.
An industry official said, "The future foundry race will be decided at 2-nanometer and below nodes and in advanced packaging technology," adding, "Samsung Electronics is also trying to stage a comeback based on the gate-all-around (GAA) process, but the ecosystem formed around TSMC will be hard to shake in the short term."