Samsung Foundry’s market share in chip making segment could fall in Q3 2020

Samsung Foundry is the world’s second-biggest player in the contract chip-making business, and it makes chipsets for various brands, including AMD, IBM, Nvidia, and Qualcomm. The company has been investing heavily to improve its fabrication technologies and to better compete with the current market leader TSMC. However, it is now being reported that Samsung’s market share could fall in the next quarter.

According to a new report from chip market analysis firm TrendForce, Samsung’s share in the global foundry business is estimated to be 17.4 percent in the April-June 2020 quarter, down 1.4 percent from the previous quarter. The company’s revenue from the foundry business was expected to jump 4 percent to reach $3.66 billion. However, TrendForce says that the growth would end up being less than the industry average.

Due to the lower sales of its Galaxy S20 series smartphones, the company has lowered the production of its in-house Exynos processors. However, due to the COVID-19 situation, the company’s clients ordered more chips than usual so that they could stock up for the future, leading to higher sales in the previous quarter.

TSMC, Samsung’s primary rival, is expected to solidify its market share even further in Q3. It is expected to capture a 53.9 percent share of the market, 2.4 percent higher than the previous quarter. The Taiwanese firm is expected to post revenue of $11.3 billion, a 21 percent improvement from its previous numbers.

Despite investing heavily, Samsung was six months to a year late compared to TSMC in starting the mass production of 5nm chips. TSMC has managed to bag 5nm chip orders from Apple and Qualcomm, and the company has already begun the mass production for Apple’s A14 series chips. Samsung, on the other hand, has been reportedly having problems related to the yield of its 5nm EUV process.