In 2021, the top five in the wafer foundry industry will occupy nearly 90% of the market share, and TSMC alone will account for about 60%.

Wafer foundry is a highly concentrated industry, with the top ten practitioners occupying 98.4% of the market share, and if it is further reduced to the top five, it also occupies nearly 90% of the proportion. As a capital-intensive, technology-intensive, and highly interactive industry, the requirements in all aspects are very high, and it is difficult to gain a firm foothold in this market by relying only on one or two projects that are slightly better.

According to DigiTimes statistics, in the wafer foundry industry in 2021, TSMC's revenue was $56.82 billion, and its market share reached a staggering 59.5%, and there was almost no competitor in the advanced process market such as 7nm and 5nm process nodes. In second place was Samsung, with the System LSI division earnings of about $18 billion and wafer foundry orders from outside contributing about $8.2 billion. The gap between TSMC and Samsung is not small, the total revenue of the latter is only less than one-third of the former, if you exclude your own orders, the pure wafer foundry business is only one-seventh of the former.

According to estimates, TSMC's capital expenditure is 54% of its revenue, which will exceed $40 billion in 2022, and usually the R& D budget accounts for about 8% of revenue. If Samsung is determined to catch up with TSMC, neither capital expenditure nor research and development expenses can be borne by Samsung's wafer foundry division itself, so Samsung will most likely not make it independent. Even if you occasionally grab one or two big customers, it is difficult to shake TSMC in a short period of time.

DigiTimes believes that the wafer foundry market may have a vertical and horizontal operation model in the future, and Samsung or Intel will find the third-ranked UMC to cooperate, let the latter share the production capacity of mature process processes, and concentrate on attacking advanced processes. At present, Samsung is already the top five customers of UMC, and will soon become the top three customers. Since UMC has announced that it will not enter the process node after 7nm, there is no technical threat for Samsung and Intel, which will participate in the wafer foundry business in the future, and everyone can take what they need.

Ranked fourth to sixth, GlobalFoundries, SMIC and Huahong Semiconductor, these second-wire wafer foundries basically do not threaten the position of the top three, coupled with the superposition of other factors, more to consolidate their own market. Manufacturers who rank lower will find a path that suits them.