A look at Samsung's struggles to compete with TSMC as it tries to acquire advanced chip manufacturing equipment from ASML
Nikkei Asia :
Context & Ripple Effects
This May 2021 report catches Samsung's foundry problem at the moment it became an equipment problem: closing the process gap on TSMC required winning a larger share of ASML's most advanced lithography tools, and TSMC wanted the same machines. The following years tested both halves of that equation — Samsung went on to lose Qualcomm's and Nvidia's business to TSMC, and both foundries ran into an industry-wide equipment shortage that analysts warned could leave advanced-chip supply materially short.
First-order effects
- Access to ASML's leading-edge tools becomes the gating resource for Samsung, which cannot match TSMC's yields or capacity without winning more of the same equipment queue.
- Every advanced system ASML ships to Samsung is capacity TSMC does not get, turning tool allocation itself into a point of competition between the two foundries.
Second-order effects
- Equipment spending only converts into revenue if execution follows — Samsung's subsequent loss of Qualcomm and Nvidia work showed customers defaulting to the foundry with proven yields.
- The equipment squeeze lengthens lead times and tightens advanced-chip availability across the industry, compounding the shortfall analysts projected for the mid-decade.
Third-order effects
- Foundry competition structurally shifts toward control of lithography supply rather than capital alone — a dependency amplified later when TSMC's conservative capex left supply-demand imbalances and pushed hyperscalers to build up Samsung or Intel as second sources.
- If AI demand continues to outstrip TSMC's capacity, the equipment base Samsung fought to assemble becomes the foundation for the customer wave now arriving, including production requests from BYD, Google, AMD, and Tesla.
The trend: Leading-edge foundry competition is increasingly decided by access to ASML's most advanced lithography, with TSMC's capex discipline periodically reopening windows for Samsung.