Taiwan Semiconductor Remains Dominant in the Chipmaking Industry

Taiwan Semiconductor Manufacturing Co (NYSE: TSM) continued to solidify its position as the leading player in the global wafer foundry market during the third quarter of 2024. The company's market share increased to 64.9%, up from 62.3% in the previous quarter, outpacing its nearest competitor, Samsung Electronics Co.

This growth is attributed mainly to the rising demand for flagship smartphone products and advancements in high-performance computing (HPC) devices. According to a report from TrendForce as cited by the Taipei Times, TSM's revenue reached an impressive $23.5 billion, marking a significant 39% increase year-over-year.

Furthermore, the contract chipmaker benefited from higher production capacity utilization and a boost in wafer shipments, allowing it to outperform its rivals. Notably, demand for TSM's advanced 3nm technology, primarily driven by Apple Inc, played a significant role in this growth. The demand was complemented by its 5nm process technology, reinforcing TSM's leadership in cutting-edge semiconductor manufacturing.

In contrast, Samsung faced stiff competition from Chinese rivals, resulting in a decline in its market share to 9.3% from 11.5% in the previous quarter. This shift highlights the challenges Samsung encounters in the advanced technology sector.

Overall, the sales from the leading wafer foundry operators totaled $34.9 billion in the third quarter, representing a 9.1% increase compared to the previous quarter, as the advanced 3nm process continues to gain momentum in the market.

In terms of ranking, China's Semiconductor Manufacturing International Corp claimed the third position with a market share of 6.0%, followed by United Microelectronics Corp at 5.2% and GlobalFoundries Inc at 4.8%.

Looking ahead, TrendForce anticipates robust global demand for emerging technologies, which is expected to drive sales growth for the top ten wafer foundry operators in the fourth quarter of 2024.

Taiwan Semiconductor and GlobalFoundries are also key contenders for U.S. chip subsidies, with TSM recently awarded a $6.6 billion grant for its semiconductor project in Phoenix, Arizona, while GlobalFoundries secured $1.5 billion for its plants in New York and Vermont.

Analysts, such as Jack Huang from SinoPac Financial, project that Taiwan Semiconductor may see a 20% growth in its business by 2025, contributing positively to the Taiex index on the Taiwan Stock Exchange.

This year has been fruitful for TSM's stock, which has surged by 99% year-to-date, providing investors with several opportunities for exposure through various exchange-traded funds (ETFs) such as the VanEck Semiconductor ETF (SMH) and the Global X Emerging Markets Great Consumer ETF (EMC).

Price Action: As of the latest updates, TSM stock is trading at $201.20, a decrease of 0.90%.

Photo by wakamatsu.h via Shutterstock

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