Samsung's grasp on foundry market's No. 2 spot grows precarious as SMIC plays catchup

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Samsung's grasp on foundry market's No. 2 spot grows precarious as SMIC plays catchup

Published: 09 Jun. 2025, 21:09 Updated: 10 Jun. 2025, 15:39

Audio report: written by reporters, read by AI

The logo of Samsung Electronics is seen at the company's store in Seoul, Korea, April 15, 2025. [REUTERS/YONHAP]

Samsung Electronics, the world’s second-largest player in the semiconductor foundry market, is under mounting pressure from China’s SMIC, which is closing the gap in market share. With Taiwan’s TSMC far ahead in first place, Samsung now finds even its hold on the No. 2 spot at risk.

According to a report released Monday by market research firm TrendForce, the combined revenue of the top 10 global foundry companies in the first quarter of 2025 was $36.43 billion, down 5.4 percent from $38.48 billion in the previous quarter.

TrendForce attributed the decline to seasonal slowdown typical of the first quarter but noted that a spike in customer orders ahead of the expiration of U.S. reciprocal tariff exemptions and lingering effects from China’s consumer subsidy program helped offset some of the drop.

The real concern lies in market share. Sandwiched between the top and third-place contenders, Samsung’s position is growing more precarious. TSMC’s first-quarter revenue of 2025 fell 5 percent from the previous quarter to $25.517 billion, but its market share rose by 0.5 percentage points to 67.6 percent.

Samsung Electronics, in contrast, saw its revenue drop 11.3 percent to $2.893 billion during the same period, with its market share slipping from 8.1 percent to 7.7 percent — a decline of 0.4 percentage points.

The logo of Taiwan Semiconductor Manufacturing Company (TSMC) is displayed at its fabrication plant in Kaohsiung, Taiwan, June 7, 2025. [REUTERS/YONHAP]

A logo of Semiconductor Manufacturing International Corporation (SMIC) is seen at China International Semiconductor Expo in Shanghai, China, Oct. 14, 2020. [REUTERS/YONHAP]

“Its limited exposure to China’s consumer subsidy benefits, compounded by the U.S.’s advanced node restrictions, contributed to the decline. Market share dipped slightly to 7.7 percent,” TrendForce explained.

The gap in market share between Samsung and TSMC widened from 59 percentage points in the fourth quarter of 2024 to 59.9 in the first quarter of 2025.

While Samsung struggles, China’s SMIC is closing in fast. In the first quarter, SMIC’s revenue rose 1.8 percent from the previous quarter to $2.247 billion — making it the only company among the top three to post growth.

Analysts attribute this to SMIC’s early inventory buildup in response to U.S. tariffs and domestic subsidies. The company’s market share also climbed from 5.5 percent to 6 percent, narrowing the gap with Samsung Electronics from 2.6 percentage points to 1.7.

Looking ahead, the report predicted a general slowdown in the foundry market in the second quarter as tariff-driven demand recedes. However, demand fueled by Chinese subsidies, inventory buildup ahead of new smartphone launches, and high-performance computing needs is expected to sustain the capacity utilization rates of the top 10 foundries.

Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff.
BY YI WOO-LIM [[email protected]]