Leading microchip manufacturers Samsung and the Taiwan Semiconductor Manufacturing Company (TSMC) have resumed global investment campaigns amid robust demand for high-performance computer technology and an easing of the coronavirus pandemic. 

On May 21, Seoul-based Samsung, the world’s largest chipmaker, announced a new $8bn foundry in Pyeongtaek, South Korea, to produce made-to-order 5-nanometre chips. Samsung expects the production line to be up and running in the second half of 2021. 


Earlier this month, Hsinchu-based TSMC unveiled plans for a new $12bn foundry in Phoenix, Arizona, to manufacture 5-nanometre microchips, which is expected to start producing in 2024. The facility will be TSMC’s second operation in the US.

The rapid global uptake of smartphones, 5G technology, and artificial intelligence applications have driven the demand for made-to-order microchips where manufacturers adopt a pure foundry model to cater to the specific needs of device manufacturers.

TSMC, the world’s biggest contract chipmaker, has 12 foundries around the world and 54.1% of global market share, according to tech sector research firm TrendForce. 

Samsung, meanwhile, has 15.9% of the made-to-order market.  Last year, the South Korean group announced plans to invest $116bn in a bid to overtake its rival and become the market leader in contract chip manufacturing by 2030. 

Global demand pressures

Competition between the two chipmakers is heating up at a time when the economic impact of the Covid-19 crisis is expected to squeeze global demand for consumer electronics. 


“In terms of market demand, the current pandemic situation means the public will almost certainly possess reduced purchasing power,” TrendForce said in a note last month.

“In response, foundries are turning elsewhere and looking for mid- to long-term demand drivers that can support the industry’s momentum, such as 5G infrastructure construction, servers and data centers for telecommunications, and IoT for industrial automation. 

“However, the demand from these mid- to long-term applications still falls short of the demand share from the potentially waning consumer market. Therefore, depending on the severity of Covid-19’s impact on the supply chain and on the consumer market, foundries will likely need to remain agile in adjusting their operational strategies and revenue forecasts.”

In spite of the pandemic, TrendForce forecasts that the contract chip market will grow between 5% and 9% in 2020.