The global chip shortage has disrupted the production of key industries from automobiles to smartphones. Samsung Electronics recently disclosed plans to triple its foundry capacity by 2026, but the market is concerned that this bold move may be due to insufficient customer support. This leads to a high risk of overcapacity.

According to digitimes, in the latest earnings conference call, Samsung Electronics stated that it will expand the EUV capacity of its S5 wafer fab in Pyeongtaek, southern Seoul, and may establish a new factory in the United States focusing on advanced manufacturing processes to meet the needs of companies The user's growing demand for customized chips.

Taking 2017 as a starting point, Samsung Electronics said that through the production of its S3 and S4 fabs and the first phase of the S5 fab in 2021, the company's current integrated foundry capacity has increased to 1.8 times the level of 2017. By 2026, as the S5 enters the second stage, mass production is planned at the plant in the United States, and its total production capacity is expected to further soar to more than three times the 2017 output.

Industry sources said that because Samsung Electronics’ foundry business will focus on advanced process nodes, the company will have to rely on additional order momentum from existing customers or grab orders from TSMC customers to increase its capacity utilization.

However, among the top 10 global customers who have launched the 5/7nm process, only Qualcomm, Nvidia and IBM have expressed their willingness to adopt Samsung’s advanced process technology. Apple, MediaTek, AMD, Intel, Xilinx, Broadcom and Bitmain have all joined forces with TSMC. Maintain a stable cooperative relationship.

The source added that Qualcomm and Nvidia have also begun to place orders at TSMC, but if the yield rate of Samsung Electronics' advanced processes is lower than their expectations, they may transfer more orders to TSMC. If so, it will be more difficult for Samsung Electronics to get orders from other potential customers.