The world’s largest contract manufacturer TSMC from Taiwan is practically at its capacity limit due to the AI boom, so more and more large companies are having their chips produced elsewhere. According to a report from Asia, Samsung is the first point of contact. According to people familiar with these matters, the South Korean electronics company is currently seeing significantly more inquiries and orders for chip production from existing and new customers. In addition to AMD, Google and Tesla, this should also include Chinese companies such as the electric car manufacturer BYD.
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A few days ago it was already reported that Google could also use Samsung alongside TSMC to produce a new generation of TPUs. Although this is only supposed to be part of Google’s 10th TPU generation planned for 2028, this would also be a great success for Samsung as a contract manufacturer. Now Nikkei Asia reports that, in addition to Google, China’s leading electric vehicle manufacturer, BYD, is also talking to Samsung about the production of upcoming semiconductors. These are therefore chips for autonomous driving.
Clients from China and the USA
“TSMC is prioritizing manufacturing in advanced manufacturing processes not only because it strengthens the company’s technology leadership and long-term strategy, but also because these processes are more profitable and remain in short supply,” said an executive at a Chinese auto chip developer who asked not to be named. “While Samsung’s manufacturing yields continue to lag behind TSMC’s, the availability of capacity has made the company an increasingly attractive option.”
Due to the tense order situation at TSMC, some Chinese chip developers would also commission Samsung to produce chips instead of relying on a contract manufacturer. “Geopolitical factors are also driving some U.S. customers to use multiple contract chip manufacturers where possible,” another chip industry executive added.
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That seems to be the industry’s current strategy. “TSMC’s advanced chip manufacturing capacity is at full capacity, making it difficult for Chinese customers with lower order volumes to place new orders,” said a chip industry source. “So some of them have approached Samsung about future opportunities.”
Tesla switches from Samsung to TSMC to Samsung
This also includes Tesla. The US electric car manufacturer has the AI4 chip for vehicles and robots manufactured by Samsung, while the upcoming AI5 will be produced by TSMC. But for the next generation, Tesla will again rely on the South Korean company and have the AI6 chips worth 16.5 billion US dollars manufactured by Samsung. Production takes place in a new semiconductor factory in Texas.
However, only large corporations can afford such a strategy for chip production, because chip development must be coordinated with chip production. When changing the contract manufacturer, enormous investments are required, for example in research and development and the coordination of the supply chain.
AMD CPUs from Samsung supposedly from 2028
For Nvidia and AMD, both major customers of TSMC, the benefits of using higher capacity from another manufacturing partner should justify the effort. According to Nikkei Asia, AMD is currently working with Samsung on various chip projects due to the current capacity bottlenecks. This will involve future processors that will be manufactured by the South Korean company from 2028.
However, the companies did not want to confirm this when asked. Samsung said it does not comment on customers. BYD declined to comment. Google said it does not comment on the details of its supply chain.
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