Key Takeaways
- Samsung Electronics is fielding chipmaking requests from major clients including Google, AMD, BYD, and Tesla amid TSMC’s capacity challenges.
- Google is exploring Samsung for manufacturing next-generation Axion processors and portions of its Tensor Processing Units, with target dates around 2028.
- Chinese EV manufacturer BYD is considering Samsung for future self-driving chip production.
- AMD is evaluating Samsung as a manufacturing partner for upcoming CPU designs.
- Only three companies—TSMC, Samsung, and Intel—possess the capability to manufacture cutting-edge semiconductors at commercial scale.
As artificial intelligence infrastructure demand continues surging, TSMC’s manufacturing capacity is reaching its limits — creating opportunities for Samsung to capture new business.
According to a Wednesday report from Nikkei Asia, [[LINK_START_1]]Samsung Electronics[[LINK_END_1]] has experienced increased interest in contract manufacturing services from prominent tech companies, including Google, AMD, BYD, and Tesla. Six sources familiar with the discussions confirmed the information.
Shares of Samsung rose approximately 1% following the report.
Samsung Electronics Co., Ltd., SMSD.L
TSMC’s production schedule remains heavily allocated to its current client base — including Nvidia, Apple, AMD, Broadcom, Marvell, and MediaTek — offering limited availability for additional orders in the immediate future. While TSMC has announced capacity expansion initiatives, constructing semiconductor fabrication facilities requires substantial investment and multi-year timelines. This bottleneck is prompting some companies to explore alternative manufacturing partnerships.
Samsung’s Potential Manufacturing Pipeline
Google is engaged in preliminary talks with Samsung regarding the production of future Axion processors, anticipated to debut around 2028. The tech giant is also weighing Samsung’s foundry services for manufacturing some of its Tensor Processing Units, the specialized chips powering its AI operations, also planned for the 2028 timeframe.
AMD is exploring the possibility of partnering with Samsung for manufacturing select future CPU models. BYD, the prominent Chinese electric vehicle manufacturer, is in conversations about producing its upcoming autonomous driving semiconductor technology with Samsung. Tesla has also reportedly initiated inquiries with the Korean chipmaker.
It’s important to note these represent preliminary negotiations rather than finalized contracts.
The Elite Tier of Advanced Chip Manufacturing
TSMC, Samsung, and Intel constitute the exclusive group of manufacturers capable of producing state-of-the-art semiconductors at industrial volume. This limited competition provides all three companies with significant negotiating power in a marketplace where artificial intelligence applications continue driving exponential demand.
Intel has been pursuing external customers for its advanced manufacturing capabilities, although its operations remain predominantly focused on internal chip production.
TSMC stock (TSM) declined approximately 3.5% on Wednesday. AMD (AMD) fell roughly 7.3%, while Intel (INTC) decreased 8.45%. GOOGL gained 1.06%.
Samsung’s foundry division has encountered yield rate and operational challenges in recent years, which previously drove certain customers to migrate toward TSMC. The conversion of these recent inquiries into confirmed orders will hinge on Samsung’s capacity to meet the stringent quality standards and production volumes these customers require.
According to TipRanks, TSMC maintains a Strong Buy consensus rating with an average price target of $465, suggesting approximately 9% upside potential from present levels. TSMC stock has appreciated roughly 40.7% year-to-date.
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