Due to Sluggish Sales of Galaxy S20 Smartphone

While Samsung Electronics' share of the global foundry market declined in the third quarter, TSMC, the world's No. 1 foundry company, increased its share. Although Samsung Electronics seems to be a little ahead of TSMC in the competition for decreasing the width of semiconductor circuits, it is behind TSMC in other areas such as transistor concentration.

Samsung Electronics' foundry sales reached US$3.53 billion in the third quarter of 2020, up 4 percent from a year ago. But its market share fell 1.4 percentage points from the previous quarter to 17.4 percent, said market research firm TrendForce on Aug. 25.

TrendForce attributed the drop to sluggish sales of Samsung Electronics' smartphone Galaxy S20, which uses the Exynos application processor provided by the company’s System LSI Division. It is not easy for Samsung’s foundry business to increase sales this year as Samsung Electronics is delaying the release of a new AP. For the recently released Galaxy Note 20, the company used the Exynos 990, which was used for the Galaxy S20. However, the company posted a sales increase compared with the same period of 2019 due to a spike in pre-orders from fabless companies, which were concerned about disruptions in foundry operations due to the spread of COVID-19.

In the third quarter of 2020, TSMC recorded a 53.9 percent market share, up 2.4 percentage points from the previous quarter. Demand for server semiconductors increased due to a rise in demand for untact systems amid the spread of the pandemic. It received increased orders from major fabless companies such as Apple, Qualcomm, Nvidia, and AMD.

Although Samsung Electronics' foundry business division is known to be slightly ahead of TSMC in introducing extreme ultraviolet (EUV) lithography, industry insiders believe that there is still a technology gap with TSMC. TSMC recorded US$3,338 in sales per wafer in 2019, higher than Samsung Electronics’ US$2,490, which means that it is more profitable than Samsung, said market research firm The Information Network. Samsung Electronics is ahead of other foundry companies, including UMC (US$1,620), Global Foundry (US$1,680), and SMIC (US$1,560).


Although Samsung Electronics’ main production line is a 5-nm process like TSMC, the Taiwanese competitor is also one step ahead in terms of semiconductor integration, not semiconductor circuit width. Samsung Electronics' 7-nm EUV product's transistor concentration stands at 95.3 MTr per square millimeter, according to Tech Centurion, a semiconductor performance review site. TSMC's 7-nm EUV products have a higher transistor concentration of 115.8. In terms of 10-nm processes, the transistor concentration of Samsung chips hit 51.8, lower than TSMC’s 60.3.

In particular, the transistor concentration of Intel's 10-nm process-based products recorded 100.8. Intel is one generation behind Samsung Electronics in terms of circuit width technology but far ahead of Samsung in terms of transistor concentration. Therefore, experts say that Samsung Electronics can catch up with TSMC only if it upgrades its performance in transistor integration.

Samsung Electronics is planning to step up its efforts to rise to the top of the foundry industry by applying the so-called Gate All Around (GAA) process that increases contacts between transistors and gates, and the Multi-Bridge Channel (MBC) Fet process. However, TSMC is also continuing to expand its investment to maintain its lead. It has recently increased its facility investment forecast for 2020 by US$1 billion from its initial estimate of US$15 billion to US$16 billion.

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