AI Boom Strains TSMC, Opens Door for Samsung in Chip Race

Citing Industry sources, the Korea Herald noted that TSMC, the world's largest contract chipmaker, has been grappling with tight capacity as orders for high-performance AI semiconductors from major tech firms continue to soar. Executives and analysts warn that supply constraints are likely to persist through 2026, despite aggressive expansion plans.

The bottleneck underscores the scale of the AI boom, which has driven TSMC to commit tens of billions of dollars annually to new fabrication facilities. The company's capital expenditure is expected to reach as much as USD 56 billion this year, reflecting sustained demand visibility from key customers.

While TSMC maintains a dominant position, commanding roughly 70 per cent of the global foundry market, its stretched capacity is prompting clients to explore alternative suppliers.

Samsung Electronics, the distant No. 2 in the foundry sector, is emerging as a key beneficiary. Though it trails significantly in market share, the Korean tech giant has been ramping up investments in cutting-edge nodes such as 2-nanometer processes to narrow the technology gap with its Taiwanese rival.

At the same time, Samsung's strength in memory, particularly high-bandwidth memory (HBM) critical for AI workloads, is boosting its overall semiconductor competitiveness. The company, along with SK hynix, dominates a large share of the global AI memory market, which has become a crucial bottleneck in AI infrastructure.

Industry experts note that the current imbalance between surging AI demand and limited chipmaking capacity could accelerate diversification in the supply chain. As customers seek to secure production slots, Samsung's foundry business stands to capture incremental orders that might otherwise have gone to TSMC.

Still, challenges remain. Samsung must prove its technological reliability and yield competitiveness at advanced nodes to win over top-tier clients that have long relied on TSMC's manufacturing leadership.

The AI-driven semiconductor boom shows little sign of slowing, suggesting that capacity, rather than demand, will remain the defining factor shaping competition among global chipmakers in the near term.

- ANI