Today, TSMC is the undisputed top dog in the semiconductor manufacturing (foundry) industry, responsible for the vast majority of leading-edge process node that powers many gadgets. So when Samsung asked the Taiwan-based company to help produce smartphone chips on their behalf, recent reports indicated the request was denied, which is somewhat surprising.
A Bait For TSMC?
That’s according to @Jukanlosreve on X (Twitter), quoting a potential deal two months ago falling apart as TSMC denied the Korean electronics giant’s deal to produce its Exynos SoCs, which will mainly serve smartphones. As for why, this has to do with a bit of corporate shenanigans, and perhaps some geopolitics playing its part too.
Keep in mind that Samsung has many divisions, with semiconductors being one of them – it does produce chips for other companies from its foundry, but the company’s technical expertise was not enough to keep up with TSMC’s most advanced nodes, often falling behind in node yields making commercialization difficult (and chipmakers are unwilling to make a deal with them as a result).
So when Samsung asks TSMC to produce chips for them, there is a possibility that trade secrets could be exposed to them – if not at least getting reverse-engineered in another attempt to get ahead of TSMC in node development. Getting the technological lead in this industry today is very much a national security matter, and the Taiwan-based firm is very keen to not lose that lead anytime soon for both economical and geopolitical considerations.
As a matter of fact, TSMC has a lead strong enough that it can confidently raise prices for fabless chipmakers to pay (and these include names like AMD, NVIDIA, Apple, Qualcomm, and even Intel to a limited extent), so it can definitely choose what customer it’d like to work with, in their terms. Until the day other foundries can challenge TSMC’s chipmaking dominance, this dynamic is not expected to change anytime soon.
Pokdepinion: That’s rather unlucky for Samsung’s Exynos division, which hasn’t seen much luck over the years to be honest.
