Taiwan Semiconductor Manufacturing Co. (TSMC) said Wednesday its clients prioritize quality above pricing in response to reports that rival Samsung Electronics Co. is cutting prices to seize a sizable share of the future market for chips using an advanced technology still under development.

"(TSMC) clients always focus on product quality," TSMC Chairman Mark Liu (???) said Wednesday when asked on the sidelines of a government technology advisory conference to comment on Samsung's reported price-cutting strategy.

Liu was clearly implying that TSMC, the world's largest contract chipmaker with a nearly 60 percent market share, can offer better quality products than its rivals amid escalating competition, including from Samsung.

Citing sources close to Samsung, the Financial Times reported earlier this week that the South Korean chipmaker was offering cut-price versions of its latest 2 nanometer prototypes to attract the interest of big-name customers such as AI chip designer Nvidia Corp.

Both TSMC and Samsung expect to begin producing chips using the 2nm process in 2025, and the Financial Times reported that Qualcomm already intends to shift production of its next-generation high-end mobile chips from TSMC to Samsung's 2nm process.

The Financial Times also said TSMC has already shown the process test results for its "N2" or 2nm prototypes to some of its biggest customers, such as Nvidia and Apple Inc., citing two people with direct knowledge of the discussions.

The report said Apple is expected to use TSMC's 2nm process to roll out chips for iPhone 17 production in 2025.

The most advanced technology currently being used by TSMC to make chips is the 3nm process, which entered mass production in late 2022.

Beyond the 2nm technology, TSMC is also developing a 1.4nm process to maintain its lead over its peers in the global market, while the chipmaker is still seeking a venue in Taiwan to build a 1.4nm wafer fab.

In addition to the Financial Times' report, Nvidia Chief Financial Officer Colette Kress said in a recent global technology forum organized by UBS that her company would be glad to find a third party for outsourcing after TSMC and Samsung, but still needed some time to figure it out.

She was thought to be referring to Intel Corp., which has voiced ambitions to overtake Samsung and eventually TSMC in the pure play foundry (contract chipmaking) market.

According to Taipei-based market advisory firm TrendForce Corp., TSMC further cemented its leading share of the global pure play wafer foundry market in the third quarter of 2023 by taking a 57.9 percent share of the market, up from 56.4 percent in the second quarter.

Samsung Electronics Co. came in second in the quarter with a 12.4 percent market share, up from 11.7 percent in the second quarter, TrendForce said.

Intel's spinoff Intel Foundry Services (IFS) took a 1 percent share in the global market in the third quarter, up 0.8 percent from the second quarter, TrendForce added.

By: DocMemory
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