🧠 Food for thought

Implications, context, and why it matters.

Samsung’s upside is limited by a wide capability gap

• TSMC’s tight capacity creates an opening for rivals like Samsung, yet TSMC still sets the pace 1.
• In 2025, TSMC held 69.9% of the global foundry market, while Samsung reached 7.2% 1.
• The split tracks a gap in results and process maturity at advanced nodes (the most cutting-edge manufacturing processes). Reports put TSMC’s 3-nanometer yield near 90%, while Samsung’s sits around 50% 2.
• That reliability gap keeps customers anchored. Nearly 99% of wafer fabrication for the top AI chip players’ AI server compute and application-specific integrated circuit (ASIC) shipments still runs through TSMC, which keeps switching costs high 3.

Capacity crunch pushes big tech toward longer contracts

• Chip designers now treat access to production as a long-term planning problem, not a quarterly purchase.
• To lock in supply, more firms are signing multi-year foundry deals instead of the shorter agreements that used to dominate 4.
• Limited slots also speed up custom silicon plans. OpenAI is working with Broadcom and AMD on AI chip efforts aimed at hardware tuned for specific AI workloads 5.
• Manufacturing still concentrates at TSMC, even for custom designs. That dependence keeps industry risk centralized and the capacity squeeze remains 5.