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
I came to Taiwan to pursue my degree thinking that Taiwanese are “friendly,” but I was welcomed by Taiwanese classmates laughing at my friend’s name, Maria (瑪莉亞). At the time, I could not understand why they were mocking the name of Jesus’ mother. Later, I learned that “Maria” had become a stereotype — a shorthand for Filipino migrant workers. That was because many Filipino women in Taiwan, especially those who became house helpers, happen to have that name. With the rapidly increasing number of foreigners coming to Taiwan to work or study, more Taiwanese are interacting, socializing and forming relationships with
Earlier signs suggest that US President Donald Trump’s policy on Taiwan is set to move in a more resolute direction, as his administration begins to take a tougher approach toward America’s main challenger at the global level, China. Despite its deepening economic woes, China continues to flex its muscles, including conducting provocative military drills off Taiwan, Australia and Vietnam recently. A recent Trump-signed memorandum on America’s investment policy was more about the China threat than about anything else. Singling out the People’s Republic of China (PRC) as a foreign adversary directing investments in American companies to obtain cutting-edge technologies, it said
The recent termination of Tibetan-language broadcasts by Voice of America (VOA) and Radio Free Asia (RFA) is a significant setback for Tibetans both in Tibet and across the global diaspora. The broadcasts have long served as a vital lifeline, providing uncensored news, cultural preservation and a sense of connection for a community often isolated by geopolitical realities. For Tibetans living under Chinese rule, access to independent information is severely restricted. The Chinese government tightly controls media and censors content that challenges its narrative. VOA and RFA broadcasts have been among the few sources of uncensored news available to Tibetans, offering insights
Two weeks ago, Malaysian actress Michelle Yeoh (楊紫瓊) raised hackles in Taiwan by posting to her 2.6 million Instagram followers that she was visiting “Taipei, China.” Yeoh’s post continues a long-standing trend of Chinese propaganda that spreads disinformation about Taiwan’s political status and geography, aimed at deceiving the world into supporting its illegitimate claims to Taiwan, which is not and has never been part of China. Taiwan must respond to this blatant act of cognitive warfare. Failure to respond merely cedes ground to China to continue its efforts to conquer Taiwan in the global consciousness to justify an invasion. Taiwan’s government
RSS