TSMC CEO Responds to Questions About Competition and Admits to Envying Samsung's Results

During the presentation of the second quarter financial results, TSMC CEO C.C. Wei addressed various issues related to competition in the semiconductor industry, focusing on the relationship with companies like Samsung and Intel, as well as commenting on the production expansion announced by ASML.

These statements came in response to questions from Morgan Stanley analyst Charlie Chan, who asked for opinions on the increase in production capacity for low numerical aperture EUV machines by ASML. The Dutch manufacturer had announced a 30% increase in the production of these systems, explaining that orders received now cover almost all available capacity. The equipment is used to produce some of the most advanced chips, particularly for artificial intelligence applications.

Wei explained that the choice of a foundry by companies such as Apple, NVIDIA, or AMD does not solely depend on the availability of production capacity. According to the executive, selecting a technology partner requires a long collaborative process that includes testing, verifications, and production line preparations. To illustrate this concept, he quoted a phrase attributed to a customer, stating that choosing a technology is not like buying a carton of milk at a convenience store and switching stores the next day if the product is unsatisfactory.

The CEO continued to elaborate, stating that a relationship of this nature generally requires about five years to be developed and consolidated, emphasizing that mutual trust and technical expertise are fundamental elements in the semiconductor foundry sector.

During the conference, competition with Intel and Samsung was also discussed. When asked how TSMC intends to face rivals supported respectively by U.S. government incentives and the significant economic results of Samsung's Foundry division, Wei responded that TSMC also benefits from public assistance, albeit without publicly announcing it.

Referring to the South Korean company, the executive acknowledged that Samsung is achieving very high profits in its foundry business, even going so far as to say, with an ironic tone, that he is "even envious" of it. Despite this, Wei believes that the true competitive advantage continues to be represented by the quality of the technology offered and the trust built over time with customers.