Samsung Holds No. 2 in Foundry Market on AI Chip Demand

Samsung's foundry business is benefiting from the expansion in AI chip production, particularly as customers seek to diversify their supply chains. With TSMC heavily concentrated in advanced AI chip manufacturing, a growing number of customers are spreading their orders, which has helped Samsung maintain its market standing.

The surge in demand is not confined to AI accelerators alone; it also extends to server central processing units, networking chips, and power management integrated circuits. This broader boost contributed to an 18% year-on-year revenue increase for pure-play foundries (excluding TSMC) in the second quarter, doubling the 9% growth recorded in the first quarter.

Despite Samsung and Intel absorbing some demand from customers seeking additional suppliers, a substantial gap with TSMC persists. TSMC reported second-quarter revenue of $40.2 billion, representing about 42% of the total "Foundry 2.0" market, which combines foundry services with back-end processes. Counterpoint noted that Samsung and Intel remain challenging substitutes for TSMC in terms of advanced-node capacity, yields, and advanced packaging capabilities.

The competitive landscape in the foundry sector is expected to broaden beyond wafer production to include advanced packaging. Counterpoint projects that packaging, substrate, and test capacity will become key variables in expanding the supply of AI chips, sustaining double-digit growth for the Foundry 2.0 market in the second half of the year.