Samsung Anticipates Significant Boost in Chip Production Amid Rising Demand From Key Clients

Samsung Electronics is receiving an increase in semiconductor production requests from Google, AMD, and BYD, according to sources cited by Nikkei Asia. This shift suggests these companies are seeking to diversify their supply chains and expand capacity for artificial intelligence (AI) and electric vehicle (EV) chips beyond their current primary providers.

The surge in interest focuses on Samsung’s foundry business, the division responsible for manufacturing chips designed by other companies. These requests come as the industry faces high demand for specialized silicon and a desire to reduce reliance on a single manufacturer, specifically Taiwan Semiconductor Manufacturing Company (TSMC), which currently dominates the global foundry market.

Why are Google, AMD, and BYD increasing requests to Samsung?

The primary driver for these companies is the need for supply chain resilience. Google, AMD, and BYD operate in sectors where chip shortages or geopolitical instability in Taiwan could halt production. By distributing orders between TSMC and Samsung, these firms mitigate the risk of a single point of failure.

Google is increasingly focused on its custom AI accelerators, known as Tensor Processing Units (TPUs). According to Nikkei Asia, the company is exploring more production options to support the massive compute requirements of its generative AI models. This move allows Google to scale its hardware infrastructure more aggressively than if it relied on a single foundry’s capacity.

AMD is pursuing a similar strategy of diversification. While AMD relies heavily on TSMC for its high-performance Ryzen and EPYC processors, sources told Nikkei Asia that the company is looking to Samsung to ensure it can meet the rising demand for AI-capable chips. This strategy prevents AMD from being throttled by TSMC’s allocation limits during peak demand cycles.

BYD, the Chinese electric vehicle giant, is integrating more custom silicon into its automotive platforms. As BYD expands its global export footprint, the demand for power semiconductors and vehicle control units has risen. The company is seeking Samsung’s production capabilities to support its vertical integration strategy, which aims to control as many components of the EV supply chain as possible.

How does this affect the competition between Samsung and TSMC?

This trend represents a potential opening for Samsung to capture market share from TSMC. TSMC currently holds a commanding lead in the foundry sector, often estimated at over 60% of the global market share. Samsung has struggled to close this gap due to lower yields on its most advanced nodes compared to its Taiwanese rival.

However, Samsung has a technical advantage in its 3-nanometer (nm) process. Samsung was the first to implement Gate-All-Around (GAA) transistor architecture, which is designed to be more power-efficient than the FinFET architecture TSMC used for its 3nm launch. If Samsung can prove the stability and yield of its GAA technology, it becomes a more attractive partner for companies designing high-efficiency AI chips.

The competition is no longer just about who has the smallest transistor, but who has the most reliable capacity. The “multi-foundry strategy” adopted by Google and AMD indicates that the market is moving away from a winner-take-all dynamic toward a more distributed ecosystem.

What role does AI and EV demand play in Samsung’s foundry growth?

The explosion of generative AI has fundamentally changed the chip market. Unlike general-purpose CPUs, AI chips require massive amounts of high-bandwidth memory (HBM) and specialized logic. Samsung is uniquely positioned because it is both a top-tier memory manufacturer and a logic foundry.

This integration allows Samsung to offer “turnkey” solutions where memory and logic are packaged together more efficiently. For companies like Google, this can lead to reductions in latency and power consumption in data centers.

In the automotive sector, the requirements differ. BYD needs chips that can withstand extreme temperatures and operate with high reliability over a decade of vehicle use. Samsung’s experience in automotive-grade semiconductors makes it a viable alternative to TSMC, particularly as BYD seeks to avoid the risks associated with concentrating its entire chip supply in one geographic region.

The shift toward custom silicon—where companies design their own chips rather than buying off-the-shelf parts—is the overarching trend. According to the reporting from Nikkei Asia, the rise in requests is a direct result of this “in-house” design movement. When companies design their own silicon, they gain more leverage to negotiate with foundries and switch providers to optimize costs and supply.