Despite aggressive campaign to bolster contract-based chipmaking for stable revenue against volatile memory market, Samsung Electronics Co. has been making little progress on the foundry front since April.

According to market researcher TrendForce on Thursday, the global foundry market is estimated to grow by 13 percent in the July-September period against previous three months. Pure-play industry leader Taiwan Semiconductor Manufacturing Company (TSMC) is expected to hold strong with a dominant 50.5 percent share in the market with sales of $9.25 billion.

Samsung Electronics is projected to follow at 18.5 percent with sales of $3.35 billion. America’s Global Foundry is forecast to have an 8.3 percent share, Taiwan’s UMC 6.7 percent and China’s SMIC 4.4 percent, according to the forecast.

Since Samsung Electronics spun off foundry business and invested heavily including building of a new facility in Hwaseong at 6 trillion won ($5.6 billion) last year with hopes to achieve revenue of $10 billion won from contract-based manufacturing, its share leapfrogged to 19.1 percent by March from 14.9 percent in December.

Jung Eun-seung, head of the foundry business at Samsung Electronics, delivers a keynote speech at Samsung Foundry Forum 2019 in Tokyo on Wednesday. [photo by Samsung Elec]

But the company failed to move forward onwards, with its share slipping to 18 percent during the April to June period, while that of TSMC edged up to 49.2 percent from 48.1 percent.

Conflict of interests due to Samsung Electronics’ complicate line of businesses still discourages many hardware makers in direct rivalry with the Korean tech giant from placing orders for their power chips.

Apple for one would choose TSMC over Samsung for its processor chips as it is locked in direct competition for premium phones with the Korean company.

To cement its top position, TSMC recently ramped up investment in extreme ultraviolet (EUV)-based process, the cutting-edge technology that Samsung Electronics has been nurturing as its future growth engine.

To make matters worse, concerns are rising that Samsung’s EUV business would suffer from the recent trade conflict between Korean and Japan as the EUV resists are subject to Japan’s export controls. Despite these worries, TrendForce predicted Samsung’s sales from foundry business this year would increase 3.3 percent from a year ago.

By Hwang Soon-min and Choi Mira

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