TSMC and Samsung: Game Changer?

● Desperate alliance

Cooperation Models and Future Strategies of Korea and Taiwan in the Global Electronics Industry

1970s: The Beginning of the Leap in the Electronics Industry

Korea and Taiwan have been fostering the next-generation electronics industry since the 1970s.
Both countries prepared for a leap forward by quickly grasping global economic and technological trends even in difficult situations.
From this time, the industrial base of the two countries gradually grew to the world’s highest level.

Success Factors of TSMC in the Semiconductor Market

TSMC records more than 90% market share in the global semiconductor market based on process technology, customer structure, and a solid ecosystem.
The latest production lines require ultra-precision technologies such as 3nm and 5nm processes, and it takes 2 to 2.5 years to build them.
In addition, the structure of supplying to over 500 customers, large-scale investment, and R&D personnel (TSMC has about 10,000, Samsung Foundry has about 3,000) are the core of competitiveness.

Korea and Taiwan, Cooperative System through Mutual Complement

Recently, Korea has surpassed Taiwan to expand trade volume, transitioning into a partner rather than a competitor.
Korea closely cooperates with Taiwan in server assembly, memory imports, etc., completing a supply chain that relies on semiconductors, especially Samsung and SK Hynix products.
This mutually complementary partnership strengthens competitiveness in global economics, the semiconductor market, and the supply chain, becoming the foundation for the growth of both countries together.

Challenges and Opportunities in the Global Market

Korea and Taiwan are employing various cooperation and competition strategies in markets around the world, including the United States, Europe, India, and Asia.
A high proportion of customers are in the United States, and semiconductors are supplied to many countries such as the United States, China, Germany, and India, forming a global supply network.
In particular, brand competitiveness such as Samsung TV sets is being re-evaluated in new markets such as smart homes and hardware-software convergence.
After the trade war during the Trump administration and the U.S.-China conflict, both countries are preparing strategies to respond to the global market with closer cooperation.

Future Outlook: Cooperation and Competition Beyond Boundaries

In the past, there was a hierarchical competition structure, but now it is transitioning to a cooperative system that leverages each other’s strengths.
For example, Samsung is cooperating with Taiwan’s UMC to improve its cost structure and simultaneously promote a strategy to reflect the needs of various customer groups.
The mutually complementary partnership in the global sphere is expected to continue in the future, contributing not only to economic growth but also to the creation of new business models.
As such, the strategies of Korea and Taiwan centered around the global economics keyword are expected to further enhance their competitiveness on the world stage.

< Summary >
Korea and Taiwan have been seizing opportunities for the development of the electronics industry since the 1970s, playing a leading role in the global economy.
TSMC's success factors, including advanced process technology, customer structure, and investment ecosystem, have changed the landscape of the semiconductor market.
Recently, the two countries have built a mutually complementary cooperative relationship in trade volume and supply chains, increasing competitiveness and innovation in the global market.
In the future, the two countries will respond to various challenges in global markets such as the United States, Europe, and Asia through cooperation, and prepare for the future with new business models such as smart homes and hardware-software convergence.

*YouTube Source: [달란트투자]

– TSMC 내부자가 말하는 TSMC가 삼성전자와 협력할 수 밖에 없는 이유｜콜리 황 1부

● TSMC’s Tech Leap – Samsung, SK Face Future Shock?

Chinese AI Companies and Global Semiconductor Trends: Samsung Foundry, AI Chip Packaging, and Nvidia H20 Strategy Analysis

1. Utilization of H20 by Chinese AI Companies and Technological Competition

Chinese AI companies will naturally use the H20 chip if the situation allows.
China has a large pool of engineers and is rapidly accumulating assets in the Huawei-based software ecosystem.
China’s persistence and coding capabilities are accumulating, making it an important variable in the competition to lead the AI revolution.
Chinese companies prefer the H20 chip due to its high software compatibility and stable ecosystem based on CUDA.
Ultimately, the source code and technological moats accumulated by numerous engineers are driving Chinese companies into a competitive situation equal to that of the United States.

2. Samsung Foundry and Customer Negotiations: Strategic Deal with Tesla

Tesla’s purchasing team visited Samsung Foundry and even negotiated prices, drawing attention.
Samsung Foundry has already produced the first-generation (14nm) and second-generation (7nm) FSD chips and is now in the process of negotiating a third-generation 4nm chip deal.
In line with Tesla’s development of various devices and humanoid robots, foundry officials have completed technology verification.
Various factors, such as technological competition with TSMC, customer diversification strategies, and geopolitical risks, are increasing the investment attractiveness of Samsung Foundry.
In addition, customer expertise in foundry’s OneDRAM, Exynos, and Qualcomm chip collaborations complements each other, contributing to enhanced competitiveness.

3. AI Chip Packaging Innovation – Emergence of ‘System on Wafer’ Technology

In the existing wafer packaging process, chip dies were divided and connected using interposers.
The new technology, ‘System on Wafer (SoW),’ is an innovative packaging method that utilizes the entire wafer as a single chip.
This method minimizes wafer scraps like rice paper and communicates between chips with Redistribution Layers (RDL), significantly improving transmission delay and heat generation issues.
However, the disadvantage is that if a defect occurs in the production process, the risk to the entire plate increases due to the omission of the substrate.
As a result, AI chip performance can be improved by up to 40 times, making it a game-changer in the next-generation semiconductor market.

4. Nvidia Export Restrictions and H20 Chip Strategy

With the U.S. government restricting Nvidia’s supply of H100 chips to China,
Nvidia has released the H800, which has 75% of the performance, and the H20 chip, which has even lower performance.
The main reason for using H20 chips in the Chinese market is the ecosystem that allows for stable use of CUDA.
In the competition between the U.S. and China for AI revolution, three factors—computing power, big data, and algorithms—are key variables.
Nvidia’s export restrictions are changing the global semiconductor competition and the structure of the AI industry.

5. Outlook from an Investment Perspective and Strategic Points

The possibility of increased utilization of Samsung Foundry and benefits to related materials, parts, and equipment (소부장), wafer testing, and packaging sectors is highlighted.
In particular, as the AI revolution and semiconductor technology continue to advance, demand for SK Hynix’s HBM3 is increasing.
The competitive landscape between TSMC, Nvidia, and Chinese AI companies is expected to provide opportunities for investors.
Market participants should carefully examine technology innovation roadmaps, customer negotiation trends, and geopolitical risks.
Ultimately, attention should be paid to global economic trends centered on key keywords such as AI revolution, semiconductors, Samsung Foundry, TSMC, and Nvidia.

Summary

Chinese AI companies are rapidly adopting the H20 chip thanks to their abundant engineering workforce and CUDA ecosystem.
Meanwhile, Samsung Foundry is collaborating with Tesla to diversify its customer base, including the progress of the third-generation FSD chip deal.
In addition, innovation in chip packaging with System on Wafer technology is expected to improve performance and reduce heat.
Nvidia is deploying its H20 chip shipment strategy in response to export restrictions from the U.S. government, acting as an important variable in the global AI market.
Investors should pay attention to key trends related to AI revolution, semiconductors, Samsung Foundry, TSMC, and Nvidia, and develop investment strategies accordingly.

*YouTube Source: [이효석아카데미]

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