TSMC and Micron Make ‘AI Winning Move’ Amid Samsung’s Labor Union Risk
Micron is pushing aggressively into the advanced memory market for AI applications. (Photo provided by Reuters)
While Samsung Electronics is held back by labor union risks, its competitors, such as Taiwan’s TSMC and U.S. Micron, are continuing their aggressive moves to secure leadership in the artificial intelligence (AI) semiconductor market.
Taiwan’s TSMC has set out to secure financial resources for advanced semiconductor investments through the sale of assets worth around 1 trillion won (approximately $680 million), and U.S. Micron has initiated the expansion of its ultra-high-capacity memory supply for next-generation AI servers.
The industry is expressing concerns that Samsung Electronics will fall behind in this global AI competition if it fails to fulfill its role due to the strike.
According to the industry on May 18, Taiwan’s TSMC recently decided to sell an 8.1% stake in its affiliate, Vanguard International Semiconductor, for about 26.8 billion New Taiwan dollars. Vanguard International Semiconductor is a company that primarily operates mature process foundries with low micro-processing difficulty, such as automotive semiconductors, as its core business.
TSMC explained that this stake sale is a decision to concentrate resources on its core business.
The industry views it as highly likely that the funds secured from the sale of non-core assets will be utilized not only for semiconductor businesses centered on AI and high-performance computing (HPC) but also for expanding advanced packaging facilities and investing in overseas production bases.
With the recent expansion of the generative AI market and the resulting surge in demand for advanced AI semiconductors, the competition to expand production capacity among global semiconductor companies is becoming increasingly fierce.
The market is paying attention to the possibility that TSMC will accelerate the expansion of its advanced packaging production capacity, which is considered a core process for AI semiconductors. TSMC is currently responsible for the production of AI semiconductors for major big tech companies, including Nvidia, and it is known that the shortage in the supply of advanced packaging is continuing. Expanding investments in overseas production bases in countries such as the United States, Japan, and Germany is also being discussed as a major investment destination.
In the case of U.S. Micron, the company is accelerating its efforts to target the advanced memory market for AI. Micron recently began supplying samples of its 256-gigabyte (GB) DDR5-based ultra-high-capacity memory modules for AI servers to major clients. Micron holds a market share in the mid-20% range for server DRAM, ranking third behind Samsung Electronics and SK Hynix.
The product is evaluated as a next-generation AI server memory product that has improved capacity and data processing performance compared to existing server memory. Analysis suggests that it is a product designed to respond to the demand for large-scale data processing required during the training and inference processes of large language models (LLMs).
While global semiconductor companies are accelerating their AI investments and competition for next-generation products, Samsung Electronics is facing the variable of labor-management conflict.
Labor and management at Samsung Electronics are in the process of a post-mediation procedure at the National Labor Relations Commission ahead of a general strike on May 21, but differences of opinion continue regarding the institutionalization of performance bonuses and the abolition of the cap.
The industry believes that the competition for leadership in the AI semiconductor market is increasingly turning into a ‘speed race.’ As major global companies embark on aggressive investments and production capacity expansions, analysis indicates that the timing of investments and whether production stability is secured could directly impact future market share and the competition to secure clients.
Cho Sung-ki, representative of Seung Labor Law Firm, pointed out, “If the dispute over performance bonuses degenerates into a means of forcing profit distribution beyond improving working conditions, it could erode future R&D and investment resources, thereby undermining industrial competitiveness.”
The semiconductor industry believes that stable cash acquisition and preemptive investment strategies are increasingly important during times of intensifying AI competition. Kwak Noh-jung, President of SK Hynix, also mentioned during this year’s general shareholders’ meeting in response to demands for expanded shareholder returns, to the effect that the company “must prepare for the future by holding sufficient cash.”
Kim Eun-jin
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