TSMC dismisses Huawei as non-threat to its chip supremacy

TSMC, the world’s largest semiconductor foundry, doesn’t see Huawei‘s resurgence as a threat. The company believes its chip technology is too advanced for Huawei, China, or any other emerging competitors to catch up to it. The Taiwanese giant’s confidence and optimism aren’t unfounded as even established players have failed to eat its market.

TSMC says Huawei and China are no trouble for it

A handful of companies dominate the global semiconductor foundry market. TSMC is the largest contract chip manufacturer by a huge margin. In Q1 2024, it captured 62% of the market by revenue. Samsung followed it distantly with a 13% share. It has been like this for many years. These are the only two firms currently manufacturing 3nm chips, the most advanced solutions yet.

Intel has also stepped into the 3nm era but it doesn’t manufacture chips for other firms. The American firm plans to expand into contract manufacturing but hasn’t started yet. Samsung also mostly produces its in-house Exynos chipsets. It is open to producing chips for others but doesn’t get as many orders as TSMC. This is primarily because the latter’s tech has always proved superior.

As such, TSMC holds a lion’s share in this market. Unsurprisingly, the company doesn’t see anyone challenging it anytime soon, not even Huawei, which has been rapidly advancing its chip technology in recent years. In its annual shareholder meeting earlier this week, TSMC’s Chairman Mark Liu said that Huawei and other emerging semiconductor firms are no threat to it.

Liu noted how the company has stood long and tall despite many competitors trying to topple it. The Taiwanese firm has thwarted all the competition. TSMC’s President Wei Zhejia echoed his colleague’s sentiments. He said it’s “impossible” for anyone to come close to the company in chip fabrication technology. Its years of experience are invaluable and can’t be replicated in a jiffy.

Huawei is working towards self-sufficiency

The US strand restrictions have severely impacted Huawei’s business. It is now mostly limited to China and doesn’t have access to the latest smartphone technologies. Chinese semiconductor firm SMIC supplies chips to the company. It uses the older DUV equipment instead of EUV, so its chips aren’t as competitive as Qualcomm’s Snapdragon, MediaTek, Dimensity, and Samsung’s Exynos.

However, backed by the state fund, Huawei is working towards self-sufficiency with a robust domestic smartphone supply chain. The road ahead is still too long—Huawei is struggling to achieve healthy nm yields while TSMC and Samsung aim to start 2nm production next year—but the Chinese firm believes that “a semiconductor breakthrough is inevitable.” Surely, competition is good for the market. But can anyone challenge TSMC, only time will tell.