Taiwan Semiconductor's Potential Intel Takeover Could Widen Gap, Threatening Samsung's Chip Business: Report

Taiwan Semiconductor Manufacturing Co’s TSM rumored acquisition of Intel Corp INTC could hinder Samsung Electronics Co’s SSNLF push to narrow the gap with the Taiwanese contract chipmaker.

The Trump administration has proposed an acquisition of Intel’s struggling foundry business, which reported a net loss of $19.2 billion in 2024.

On the other side, Samsung noted slow demand for conventional chips in personal computers and mobile phones, which affected its memory business.

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Rising R&D costs and early investments in expanding advanced-chip processing capability also affected its earnings.

Samsung lagged behind SK Hynix in making the best memory chips for artificial intelligence, affecting its chip-making profit. Also, the Trump administration’s aggressive tariffs perpetrated uncertainty over Samsung’s mobile and consumer businesses.

Broadcom Inc AVGO has been examining Intel’s chip design and marketing business, fueling rumors of a potential takeover.

Samsung’s foundry unit failed to become profitable over the years.

Last November, Samsung named Han Jin-man, executive vice president of its U.S. semiconductor business, to lead its foundry unit. His inaugural message stressed the importance of a “rapid ramp-up” of foundry production using the 2-nm process.

Kim Hyung-jun Kim of South Korea’s Next-Generation Intelligent Semiconductor Foundation Group and Seoul National University told the Korea Economic Daily that if Taiwan Semiconductor could employ Intel’s .U.S factories, it could help boost the former’s market share to ~75% (up from 64.9% in the third quarter of 2024) at the cost of Samsung, which has a 9.3% market share.

Needham’s Charles Shi expects the takeover to lead to capital efficiency, a long-term negative for Semiconductor Capital Equipment (Semicap) companies. Shi noted that the takeover would negatively impact ASML Holding ASML and KLA Corp KLAC due to the cancellation or scaling back of Intel’s aggressively pushing high-NA EUV program.

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