Samsung vs. TSMC – Between a ‘Respectable Competitor’ and a ‘Formidable Rival’

At the Frontline of the Semiconductor War: What Are We Witnessing?

We are now standing in the middle of one of the fiercest battles for semiconductor supremacy. The ongoing competition between Samsung Electronics and Taiwan’s TSMC is not just a corporate rivalry—it is a national struggle, a fight for technological dominance, and a global power play.

But here’s an intriguing point: TSMC’s founder, Morris Chang, once corrected a journalist who referred to Samsung as a "respectable competitor." Instead, he insisted that Samsung was a "formidable rival."
This single statement reveals a lot. What is the difference between being ‘respectable’ and ‘formidable’? And how should we interpret Samsung’s current position?

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1. Samsung as a ‘Formidable Rival’

The term ‘formidable’ carries two key implications.
First, it acknowledges Samsung as a strong competitor. TSMC recognizes that Samsung’s technological capabilities and financial strength cannot be ignored. Samsung is the undisputed leader in memory semiconductors and is aggressively expanding into the foundry (contract manufacturing) market.

Second, it suggests Samsung is an unpredictable challenger. While TSMC dominates the foundry sector, Samsung has the potential to disrupt the landscape at any moment. With continuous innovation and process improvements, Samsung could change the rules of the game and weaken TSMC’s grip on the industry.

But reality is far more complex.

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2. Why Is Samsung ‘Formidable’ but Not Yet the Winner?

① Market Share Disparity

TSMC currently commands over 60% of the global foundry market, while Samsung holds only 10-15%.
This enormous gap is not something that can be closed overnight.

② Technological Leadership and Reliability

The semiconductor industry values trust above all. Despite its advancements, Samsung has struggled to win major clients like Apple, Qualcomm, and Nvidia in the foundry sector—not just due to technical reasons but also because of concerns over consistency and reliability.
TSMC, on the other hand, has spent decades perfecting its customer-tailored production systems, a competitive edge that cannot be easily replicated.

③ Leadership and Decision-Making

TSMC has maintained strong leadership and continued strategic investments even after Morris Chang stepped down.
In contrast, Samsung has faced leadership instability due to its reliance on family-run management. The lack of a clear, long-term vision at times has led to strategic inconsistencies in its foundry business.

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3. From a ‘Formidable Rival’ to an ‘Industry Leader’: What Samsung Needs to Do

① Reviving Its ‘Extreme Differentiation’ Strategy

Samsung's past success in memory semiconductors was built on an "extreme differentiation" strategy. However, in the foundry business, it has yet to establish a unique value proposition.
To compete, Samsung must invest in long-term R&D and process innovation instead of seeking short-term gains.

② Strengthening Global Partnerships

While TSMC has built strong alliances with the U.S., Japan, and Europe, Samsung has remained more Korea-centric in its approach.
With shifting global semiconductor supply chains, Samsung must forge deeper relationships with international clients and gain their trust.

③ Developing a Robust Semiconductor Ecosystem

Semiconductors are not made in isolation. They require a well-integrated ecosystem of equipment, materials, and design partners.
Unlike TSMC, which has cultivated a thriving semiconductor ecosystem in Taiwan, Samsung’s ecosystem is still heavily dependent on internal production.
To succeed, Samsung must support its suppliers and adopt a more open collaboration strategy.

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4. Is Samsung Facing a Crisis or a New Opportunity?

Samsung remains a formidable presence in the semiconductor industry, but it is not yet the undisputed winner.
Unlike Samsung, TSMC is not just a semiconductor company—it is a national treasure backed by the Taiwanese government.
If Samsung is to catch up, it needs internal reforms, a clear strategic direction, and stronger national-level support.

As Morris Chang implied, if Samsung wants to evolve from being a ‘formidable rival’ to a ‘respected leader,’ it must become more innovative, more open, and more forward-thinking.

Otherwise, even the title of "formidable rival" might eventually disappear.
How do we see Samsung’s future?