Samsung Electronics faces huge obstacles to its goal of becoming the largest contract manufacturer by 2030, as TSMC plans to invest $44 billion in 2022 to consolidate its leading position, of which $42.1 billion will be invested in contract manufacturing. more than Samsung's total investment of $33.5 billion in memory, contract manufacturing and infrastructure last year.
According to South Korean media reports, 2022 will be the first year in which Samsung Electronics has been surpassed by TSMC in chip investment. The former's capital expenditure this year is about $37.9 billion, but the capital expenditure in 2020 and 2021 reached $27.7 billion and $33.7 billion respectively, greatly exceeding TSMC's $15.5 billion and $30 billion in the same period.
The report pointed out that this means that the uncertainty that it wants to replace TSMC as the leader of contract manufacturing will be further increased. "as the contract manufacturing business requires a huge investment, it is very difficult for Samsung Electronics to catch up with TSMC under the current business structure."
Behind TSMC's massive chip investment is its amazing performance in 2021. Last year, TSMC's revenue rose 24.9 per cent year-on-year to $56.8 billion, while operating profit rose 40.9 per cent to $23.2 billion, almost 90 per cent of Samsung's overall operating profit of $25.6 billion in its chip business.
As TSMC increases its chip investment, the gap between TSMC and Samsung Electronics is expected to widen further. TSMC accounted for 53.1% of the global contract semiconductor market in the third quarter of last year, followed by Samsung Electronics with 17.1%, according to TrendForce.
Samsung Electronics is fully aware that it cannot surpass TSMC in scale, so it is going all out to take the lead in technology, and its goal is to mass-produce 3nm chips in the first half of this year. This is at least a month ahead of TSMC's mass production plan (the second half of the year).
