In a footrace, when the field bunches up behind the leader, most people read it as the leader slowing down. Taiwan Semiconductor Manufacturing (TSM) just delivered a case that runs the other way.
New foundry market data shows the world’s largest chipmaker pulling further ahead of its nearest rival, even as a different rival closes in on that same target from below.
TSMC’s global foundry market share climbed to 72.5% in the second quarter, up from 72.3% in the first, according to TrendForce. The move looks modest on paper, but it happened while advanced 3-nanometer and 5-nanometer lines ran at full capacity for AI server chips.
TSMC’s foundry sales reached nearly $40.2 billion, up 12.1% sequentially, helped by early iPhone inventory building.
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A different count from Counterpoint Research puts TSMC’s share even higher, near 73%, under a broader market definition. The figure varies by methodology. The direction doesn’t: Every tracker shows the same company pulling away.
The more telling number sits one layer beneath the headline share figure. TrendForce put Samsung Electronics’ (SSNLF) share at 5.9% for the quarter and 6.5% for the first, and the arithmetic tells its own story. The gap between the top two foundries widened from 65.8 to 66.6 points in a single quarter.
TSMC did not need a rival to stumble to extend its lead. It just kept building.
TSMC’s lead over Samsung just got wider
Samsung’s own quarter explains why the gap grew. Revenue rose just 1.8% to about $3.26 billion, helped by new advanced-process orders, TrendForce found. Its share still slipped because TSMC and smaller rivals grew faster.
Samsung is pouring money into yield improvements for its next-generation SF2 process, hoping to close the technology gap that keeps customers loyal to TSMC, Counterpoint Research noted. So far, it hasn’t shown up in the share numbers.
SMIC is closing a different gap, not TSMC’s
While Samsung falls further behind TSMC, it is being chased from underneath. China’s Semiconductor Manufacturing International Corp, known as SMIC, posted revenue near $3.01 billion, up 20% from the prior quarter, pushing its market share to 5.4% and narrowing the distance to Samsung to just half a percentage point.
That growth came less from AI chips and more from advance procurement across PC and notebook supply chains, plus demand tied to global memory shortages, the research firm said.
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It is a different customer base than TSMC’s.
Those are two separate competitive stories inside the same report, and most coverage collapses them into one. TSMC’s advantage over the entire field is widening.
Samsung’s advantage over SMIC is shrinking. Both are true at once, and only one of them involves TSMC directly.
A few more numbers from that count:
- United Microelectronics Corp (UMC) of Taiwan held a 3.9% share, on revenue of about $2.18 billion.
- U.S.-based GlobalFoundries (GFS) took 3.2% on revenue of roughly $1.79 billion.
- Combined revenue across the top 10 foundries hit a record $53.49 billion, up 11.5% from the prior quarter.
- Source: TrendForce
TSM stock trades well off its record high
Despite this record-breaking quarter for the industry as a whole and TSMC’s commanding market share, Wall Street’s reaction has remained unexpectedly lukewarm.
The stock market’s reaction has not matched the dominance story. Shares closed Thursday, Sept. 10, at $428.03, down 1.68%. That is roughly 10% below the stock’s all-time closing high of $477.57, set on June 30.
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Analysts tracked by S&P Global Market Intelligence still rate TSM a consensus Strong Buy, with an average 12-month price target of $552.38, implying over 25% upside from current levels.
Shares fell the same day TSMC reported record August revenue growth of 53.3%, extending its monthly streak to four straight records, according to CNBC. That gap between the headline numbers and the stock’s muted reaction suggests investors are weighing near-term spending more than the share gains.
Washington’s tariff plan could lock in TSMC’s edge
The gap TSMC is building may soon get reinforcement from an unlikely source: U.S. trade policy.
Commerce Secretary Howard Lutnick said this month the administration is preparing new semiconductor tariffs exempting companies that manufacture inside the United States, according to Bloomberg.
TSMC’s $265 billion Arizona buildout, described on the company’s own investment page, puts it on the right side of that line.
Samsung and SMIC lack anything close to that scale of U.S. manufacturing, and SMIC faces separate U.S. export restrictions on chipmaking equipment that Samsung doesn’t. If the tariff framework Lutnick described becomes policy, the foundry gap TrendForce just measured would stop being purely a function of capacity and start being reinforced by trade law.
For investors watching the AI buildout, that combination, capital scale paired with policy protection, is a moat that gets harder to challenge each quarter it goes unaddressed.
The market share numbers explain how TSMC got here. The tariff numbers may explain why nobody catches up.
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