Samsung on the Brink of Losing Chipmaking Crown to TSMC Following Q3 Earnings Report

Samsung’s semiconductor division faces stiff competition from Taiwan-based TSMC. TSMC continues to outperform Samsung even as the latter strives for increased performance and yields on its advanced nodes.

The Korean company may wind up losing its position as the world’s largest chipmaker by sales to the Taiwan Semiconductor Manufacturing Company as a result of the potential for a significant earnings dip this past quarter. 

Back in 2017, Samsung shattered Intel’s 24-year-old sales record to overtake Intel as the top chipmaker in the world. That was made feasible by Samsung’s cutting-edge DRAM and flash storage technologies and the enormous demand for these goods. Samsung staged a return in 2021 to retake the top spot after Intel was able to surpass it in 2019

Samsung currently faces a challenge in holding onto this title, as memory goods now account for the majority of its sales. The company’s DRAM sales have decreased for the second consecutive quarter, and the challenging market conditions aren’t anticipated to get any better very soon. Samsung has previously stated that it anticipates a fall in Q3 2022 profit. The decrease would mark the first in three years.

TSMC has consistently defeated Samsung with commanding victories. Qualcomm reportedly had to transfer all orders for its 3nm CPUs to TSMC as a result of yield problems at Samsung. Additionally, it is said that Apple chose TSMC over Samsung to produce its 3nm M3 and A17 Bionic CPUs. 

TSMC’s 5nm technology shows immense potential which has led to it gaining multiple orders. | Image: TSMC

The third quarter of 2022 ended with TSMC reporting earnings of $19.4 billion, exceeding market expectations. Analysts predict that despite expecting $17.8 billion in revenue for the quarter, Samsung’s semiconductor division won’t be able to reach these numbers. For the first time, TSMC would surpass Samsung in chip sales if these projections come true.

Samsung’s semiconductor sales have been impacted by the slowdown in memory product demand. Since it exclusively performs contract manufacturing work for businesses like Qualcomm, NVIDIA, and numerous others, TSMC has generally stayed immune to it. Things could get worse before they get better for Samsung given the anticipated continued decrease in memory product prices.

Muhammad Zuhair
Passionate about technology and gaming content, Zuhair focuses on analysing information and then presenting it to the audience.
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