Samsung plans to rival chip foundry market leader TSMC, as it invests heavily in a chip miniaturization process called extreme ultraviolet lithography
- Custom chips are the future that Samsung wants to profit from — Laying the foundation for expanding its semiconductor empire
Context & Ripple Effects
Samsung has been building toward this for years: it separated its foundry business into a standalone unit back in 2017 and laid out a process roadmap down to 4nm. The EUV push is the tooling bet underneath that roadmap — miniaturization at the leading edge is what makes Samsung a credible second source to TSMC rather than a niche one.
The follow-through shows up across the corpus: Samsung went on to break ground on a 5nm fabrication facility in Pyeongtaek explicitly aimed at TSMC's contract chipmaking business, while domestic rival SK Hynix committed its own ~$8B in EUV lithography tools from ASML through 2027 to compete in DRAM and HBM. South Korea's stated plan for Samsung and SK Hynix to invest more than $470B by 2047 frames this as national-scale capacity building.
First-order effects
- Custom-chip customers evaluating TSMC gain a second leading-edge foundry option, forcing TSMC to defend its contract-manufacturing lead on process capability rather than incumbency alone.
- ASML becomes the chokepoint supplier: Samsung's heavy EUV investment puts it in direct competition with SK Hynix for cutting-edge lithography tools.
Second-order effects
- A viable Samsung foundry alternative pressures TSMC on pricing and allocation for advanced nodes, shifting bargaining power toward fabless designers sourcing custom silicon.
- Korea's chip ecosystem concentrates further around Pyeongtaek and the broader plant-building program, pulling equipment suppliers and research investment into the country.
Third-order effects
- If the pattern holds, contract chipmaking consolidates into a two-player leading-edge race between Samsung and TSMC, with EUV tool access from ASML as the gating resource — and memory rivals like SK Hynix competing for the same supply.
- The $470B Korean investment program points toward state-coordinated semiconductor capacity as a strategic instrument, embedding foundry competition in industrial policy.
The trend: Leading-edge chipmaking is consolidating into an EUV-capability arms race, with Samsung converting years of foundry restructuring into a direct challenge to TSMC's contract-manufacturing dominance.