South Korea’s Samsung Chip Q3 revenue remains flat, recovery is slower than expected, sales leader may not be maintained

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In a recent interview, analysts discussed the competitive landscape between Samsung and TSMC, particularly regarding the semiconductor industry. According to reports from the Korea Herald, TSMC is expected to outperform Samsung’s chip division in Q3 revenue, reclaiming its position as the global leader in chip sales.

Samsung’s preliminary Q3 earnings report indicates a remarkable year-over-year revenue increase of 17.2%, reaching 79 trillion won (approximately $57.7 billion), marking a new historic high. The company plans to release detailed performance reports for all divisions on October 31. The Device Solutions (DS) division, responsible for Samsung’s chip business, is projected to generate 28.56 trillion won ($20.86 billion) in Q3, maintaining similar results to Q2.

In contrast, TSMC recently announced a 39% year-on-year revenue increase, totaling NT$759.69 billion (around $23.5 billion) in Q3, setting a new record. If Samsung’s DS division meets market expectations, it may still fall short against TSMC.

Analysts have noted that a revival in memory demand and rising prices in Q2 significantly boosted Samsung’s DS division, allowing it to narrowly surpass TSMC. However, industry insiders predict that the recovery in Samsung’s chip demand is lagging behind expectations, leading to stagnation in performance improvement. This could result in Samsung’s chip business losing ground to TSMC once again.

Historically, TSMC’s revenues have outpaced those of Samsung’s chip operations since Q3 2022.

Driving TSMC’s outstanding performance is the boom in artificial intelligence (AI), where the company has effectively monopolized the advanced AI chip production for Nvidia. Meanwhile, Samsung is struggling to make a significant impact in the AI sector. TSMC shows a substantial lead in the foundry market as well, holding a market share of 62.3% in Q2, far surpassing Samsung’s 11.5%.

The Korea Herald also points out that Samsung is facing challenges such as poor order volumes, low capacity utilization, and one-time costs, predicting that losses in its non-memory chip sectors—including foundry and system LSI—could exceed 1 trillion won in Q3.