Samsung Electronics is offering lower prices for its foundry service in a bid to increase its market share, according to foreign media reports.
Samsung reportedly took such aggressive action as TSMC’s foundry market share steadily expanded despite worsening semiconductor market conditions.
TSMC is estimated to account for 52.7 percent of the foundry market in the fourth quarter this year, according to Trendforce, a market research institution. Meanwhile, Samsung’s market share is forecasted to be 17.8 percent, down 0.7 percentage point from the previous quarter (18.5 percent).
Although Samsung has refused to disclose the result of its price negotiation with customers, industry watchers say that the tech giant is highly likely to have reduced its prices. Samsung is seeking to enhance its market power by accelerating the development of microfabrication technologies and lowering prices at the same time.
With most of TSMC’s production lines being occupied to produce chips for global IT companies including Apple and Huawei, Samsung plans to attract new customers by competitive prices.
In addition, some say that Samsung’s recent efforts to obtain orders from Chinese fabless companies (semiconductor design companies) and IT companies are aimed at narrowing its gap with TSMC. The Taiwanese company dominates the market through long-lasting cooperation with Chinese companies.
Samsung has recently agreed to produce artificial intelligence (AI) chips for high performance computing for Baidu.
As some forecast an early recovery of the global memory semiconductor market, global foundry companies are expected to compete more fiercely to secure production volume for next year.