Whether in terms of market commonality or resource similarity, South Korea’s Samsung Electronics Co is the biggest competitor of Taiwan Semiconductor Manufacturing Co (TSMC). The two companies have agreed to set up factories in the US and are also recipients of subsidies from the US CHIPS and Science Act, which was signed into law by former US president Joe Biden.
However, changes in the market competitiveness of the two companies clearly reveal the context behind TSMC’s investments in the US.
As US semiconductor giant Intel Corp has faced continuous delays developing its advanced processes, the world’s two major wafer foundries, TSMC and Samsung, have overtaken it and become the main force in advanced chip manufacturing.
In late November 2021, Samsung announced a US$17 billion plan to build a new fab in Taylor, Texas, fully cooperating with the Biden administration’s policy to increase domestic semiconductor production capacity in the US, attempting to leverage its strengths to surpass TSMC as the leading wafer foundry.
In May 2022, Biden embarked on his first trip to Asia during his term, with South Korea as the first stop. The first item on his itinerary was to visit Samsung’s Pyeongtaek complex to inspect the latest generation of chip production using 3-nanometer process technology — a move of full endorsement of Samsung Group. South Korean President Yoon Suk-yeol was there to receive Biden.
South Korean newspaper the Chosun Ilbo reported at the time that Biden’s visit to the Samsung facility once again confirmed that South Korea’s semiconductor industry is a core strategic asset that supports the strategic value of the US-South Korea alliance. South Korea had broken away from its unilateral reliance on the US for security and established a mutually beneficial alliance on an equal footing.
An editorial in another South Korean newspaper, the JoongAng Ilbo, said that semiconductor diplomacy is the first step in upgrading the US-South Korea alliance, greatly enhancing the pride of the South Korean public and increasing the level of mutual trust in the alliance.
To seize the opportunity to benefit from the subsidies of the CHIPS and Science Act, Samsung has increase its investment in the US, even boasting that it would build 11 wafer fabs in Texas within 20 years, with a total investment of up to US$200 billion.
To compete with TSMC, Samsung’s new plant in Taylor is ambitiously targeting the most advanced 4-nanometer and 2-nanometer chip production. It also promises to establish a complete semiconductor industrial chain ecosystem, including advanced packaging plants, and research and development centers, which is in stark contrast to TSMC’s steady and cautious style.
In April last year, then-US secretary of commerce Gina Raimondo announced that Samsung had received a US$6.4 billion subsidy from the US government.
However, at the end of last year, the US Department of Commerce cut the subsidy to US$4.75 billion, a reduction of one-quarter. The crux of the problem was that construction of the new fab in Texas was behind schedule, and the 2-nanometer process yield of the parent fab in Pyeongtaek was poor, which delayed the new fab in Texas from receiving orders from major customers, forcing the company to announce the withdrawal of South Korean staff and cancel the investment plan for the advanced packaging fab.
At the same time, the first 4-nanometer production line of TSMC’s first wafer fab in Phoenix, Arizona, started mass production ahead of schedule in the fourth quarter of last year.
Moreover, the gap between Samsung and TSMC is widening.
In his speech to the US Congress this month, US President Donald Trump called to scrap the “horrible” CHIPS and Science Act. He wants to repurpose the remaining funds, including to reduce the national debt. This would make Samsung the No. 1 victim. The state of the Samsung investment in Texas is the perfect excuse for the Trump administration to reduce or completely cancel subsidies and TSMC’s US$100 billion investment project puts it in pole position.
Chen Yung-chang is a company manager.
Translated by Lin Lee-kai
They did it again. For the whole world to see: an image of a Taiwan flag crushed by an industrial press, and the horrifying warning that “it’s closer than you think.” All with the seal of authenticity that only a reputable international media outlet can give. The Economist turned what looks like a pastiche of a poster for a grim horror movie into a truth everyone can digest, accept, and use to support exactly the opinion China wants you to have: It is over and done, Taiwan is doomed. Four years after inaccurately naming Taiwan the most dangerous place on
Wherever one looks, the United States is ceding ground to China. From foreign aid to foreign trade, and from reorganizations to organizational guidance, the Trump administration has embarked on a stunning effort to hobble itself in grappling with what his own secretary of state calls “the most potent and dangerous near-peer adversary this nation has ever confronted.” The problems start at the Department of State. Secretary of State Marco Rubio has asserted that “it’s not normal for the world to simply have a unipolar power” and that the world has returned to multipolarity, with “multi-great powers in different parts of the
President William Lai (賴清德) recently attended an event in Taipei marking the end of World War II in Europe, emphasizing in his speech: “Using force to invade another country is an unjust act and will ultimately fail.” In just a few words, he captured the core values of the postwar international order and reminded us again: History is not just for reflection, but serves as a warning for the present. From a broad historical perspective, his statement carries weight. For centuries, international relations operated under the law of the jungle — where the strong dominated and the weak were constrained. That
On the eve of the 80th anniversary of Victory in Europe (VE) Day, Chinese Nationalist Party (KMT) Chairman Eric Chu (朱立倫) made a statement that provoked unprecedented repudiations among the European diplomats in Taipei. Chu said during a KMT Central Standing Committee meeting that what President William Lai (賴清德) has been doing to the opposition is equivalent to what Adolf Hitler did in Nazi Germany, referencing ongoing investigations into the KMT’s alleged forgery of signatures used in recall petitions against Democratic Progressive Party legislators. In response, the German Institute Taipei posted a statement to express its “deep disappointment and concern”
RSS