TSMC still leads chipmaking sector despite achievements by Samsung.

$Taiwan Semiconductor (TSM.US)$ $SAMSUNG EL 144 (SSNGY.US)$ Samsung’s foundry division has been having production issues since the start of 2021 when it was unable to increase yields for its 5nm chips. This caused its biggest client, Qualcomm, to outsource more production to TSMC at the expense of Samsung.

Meanwhile, TSMC is expected to launch its 3nm chips by the end of this year, with production taking place at fabs in Tainan and Hsinchu, Nikkei noted.

TSMC has several advantages over its Korean rival that makes it attractive to clients like Apple. Namely, TSMC is not a direct competitor in the smartphone segment like Samsung, so it’s easier for clients such as Apple to trust TSMC with its proprietary chip designs. The Taiwanese chipmaker also has a unique lineup of off-the-shelf design data that complements a customer’s chip designs, according to Nikkei.

To try and catch up with TSMC, Samsung has recently replaced several executives. Kyung Kye-hyun, previously the CEO of Samsung Electro-Mechanics, was named the head of Samsung’s chipmaking Device Solutions department last December, while last month the company replaced around a dozen senior managers, including the head of the foundry manufacturing technology center, the report said.

The reshuffle points to Samsung seeking to revamp its manufacturing technology, in addition to reorganizing its executives, which are currently largely comprised of those who have backgrounds in memory chips.

Competition between TSMC, Samsung, and Intel in the foundry market is expected to remain fierce going forward. Especially since overall consumer electronics demand is now trending downward due to global inflation worries.