South Korea’s Samsung Electronics aimed to secure contracts for packaging new 3nm chips but ultimately lost to Taiwan’s TSMC, a dominant player in the semiconductor industry. The competitive landscape highlighted why TSMC remains the preferred partner for advanced chip packaging and manufacturing. The decisive factor noted was TSMC’s exclusive rights to produce Nvidia chips through its cutting-edge packaging method, known as Chip on Wafer on Substrate, or CoWoS, which integrates wafer-scale packaging with high-density interconnects to boost performance and efficiency.
Industry observers point out that AI-related chips demand exceptionally sophisticated packaging technology. In highly compact designs, several components shrink to sizes far smaller than the thickness of a human hair during assembly, pushing packaging requirements beyond conventional methods. To date, TSMC has stood out as the sole provider capable of delivering these ultra-advanced solutions at scale.
As a result, major players such as Nvidia, Apple, and AMD have become heavily reliant on TSMC to fabricate their core products, underscoring the critical role of packaging capability in sustaining product performance and supply chains. This reliance explains why many tech leaders prefer TSMC’s production lines, even as Samsung Korea advanced its own 3nm mass production efforts ahead of TSMC in 2022. The continuous emphasis on quality and capability in packaging has kept the Taiwanese firm at the forefront of the sector.
Analysts observe that the market share gap between TSMC and Samsung continues to widen in favor of the Taiwanese giant. The strategic move by TSMC to prioritize high-end packaging around mid-year further reinforced its leadership position. Yet Samsung remains resolute, pursuing new packaging solutions and process innovations with the aim of closing the gap and reclaiming competitive momentum in the global market.
Historically, Samsung has pursued leadership in chip fabrication, yet current industry dynamics show the complexity and scale of the packaging segment as a decisive factor in overall competitiveness. The ongoing push for more compact, higher-performance chips continues to shape strategies across the global semiconductor ecosystem, with both companies investing heavily in research, development, and manufacturing capacity to meet evolving demand across cloud computing, AI workloads, and consumer electronics.