'Samsung is strong competitor': TSMC founder

This March 25 photo shows two water trucks passing a Taiwan Semiconductor Manufacturing Company (TSMC) factory in Taichung, central Taiwan. AFP-Yonhap

By Kim Yoo-chul

Analysts are paying attention to TSMC founder Morris Chang's comments describing Samsung as the biggest threat to his company just a few weeks ahead of a planned summit between President Moon Jae-in and U.S. President Joe Biden in Washington D.C.

Chang's rare comments came as Samsung Electronics gauges the “right timing” for a massive new investment into semiconductors in the United States.

At an industry event held Thursday in central Taiwan, the TSMC founder ― who is well-known over his hawkish, direct and strong tone when it comes to describing Samsung Electronics ― said he believes the Korean tech giant remains the strongest competitor in the foundry (contract-based chip manufacturing) sector.

This is the first time that Chang, considered the “father of Taiwan's semiconductor industry,” has directly mentioned Samsung at a business event.

Specifically, he referred to the similarity of the corporate culture of the two conglomerates ― both have a rich talent pool, they assign executives with tough tasks on tight deadlines, and are focused on performance-oriented qualities. Also the two were established in countries that have well-developed sea and air transport logistics, considered crucial elements for a foundry to remain globally competitive.

Samsung Electronics is the world leader in the memory semiconductor segment, while TSMC leads the global foundry market, the sector which is much more profitable and promising. This is because memory chip sales are the result of scalability and on-time fabrication; while foundry work manufacture is more sophisticated and requires highly-advanced technology given that the chips control the stability of processing in computing devices, and are therefore much more expensive.

Meanwhile, Samsung is “very near” to officially announcing an investment of $17 billion in Texas, the United States, where it operates a huge foundry chip plant for clients such as Apple. Samsung hasn't applied to buy land in the state of Arizona, raising speculation that its discussions on incentive packages in return for building new factories in Texas have been finalized.

“The official announcement regarding Samsung' new semiconductor investment plan will be made public before Moon's summit with Biden at the White House, next month,” a source said.

The Korean tech giant plans to become the world's largest semiconductor company overall by overtaking TSMC by 2030.

The TSMC chief stressed he doesn't see China as any serious threat in the foundry business, as its technology lags far behind the two leading firms.