Samsung to Become a More Attractive Alternative
TSMC, the world's No. 1 foundry company, has reportedly abolished bulk discounts for major customers for the first time in about a decade. The company’s move is expected to make Samsung Electronics a more attractive alternative.
TSMC has abolished its policy of giving a 3 percent discount per 12-inch (300mm) wafer to major customers. Industry insiders say that TSMC's decision will negatively affect the profitability of major customers such as Apple and AMD. TSMC said the decision is aimed at securing the financial resources needed to increase the production volume of 5-nm products by 20 percent by the first half of 2021. But some industry analysts point out TSMC simply aims to dial up its profits easily. The company posted US$5.11 billion in operating profit in the first three quarters of 2020, up 39 percent from the same period of 2019.
As a result, major fabless manufacturers are turning their eyes to Samsung Electronics. "We need another high-tech fab other than TSMC," said Patrick Moorhead, founder of Moor Insights & Strategy, a technology consulting firm.