Samsung's Mission Impossible: To Take the Chip Crown from TSMC

For South Korea, this is more than a business battle; it's a matter of national pride and economic survival. Samsung, its technology champion, has launched an all-out offensive to catch up with rival TSMC in the race for 2nm chips, a contest that will define its future and that of the Korean economy.

At Samsung's Suwon headquarters, the pressure is palpable. South Korea's largest company is at a historic crossroads. Despite being a global giant, it is dangerously behind in the most crucial battleground of modern technology—cutting-edge semiconductor manufacturing. Its mission: to close the gap with Taiwanese leader TSMC in 2-nanometer (nm) chip production before it's too late.

For South Korea, whose economic model relies heavily on its tech conglomerates, Samsung's success or failure in this mission has national security implications.

The magnitude of Samsung's challenge is daunting. Although both companies aim to begin mass production of 2nm chips in the second half of 2025, they start from very different positions:

• Market Share: TSMC holds a near-absolute dominance with 67.6% of the chip foundry market, while Samsung holds a distant 7.7%.
• Yield Rate: This is the most critical technical factor. Industry reports place TSMC's yield rate for its 2nm prototypes above 60% (viable for mass production), while Samsung's is hovering around a worrying 40%.

Despite the disadvantage, Samsung is not giving up and has designed a counterattack strategy on several fronts:

• Capitalizing on GAA Experience: Samsung was the first in the industry to use the advanced Gate-All-Around (GAA) architecture on its 3nm node. Although the experience was difficult and plagued by low initial yields, the company hopes the lessons learned will give it an advantage in stabilizing and accelerating 2nm production.
• A Flagship Product: Samsung's first 2nm chip is expected to be the Exynos 2600, the brainchild of its upcoming flagship smartphone, the Galaxy S26. This ties the abstract technology race to a mass-market product, increasing the pressure to deliver.
• Strategic Hiring: In a bold move, Samsung recently hired Margaret Han, a former TSMC executive, to lead its US foundry business, a clear sign that it is looking to acquire its rival's know-how.

The outcome of this battle transcends Samsung's balance sheet. If the national champion fails to become competitive in the manufacture of cutting-edge chips, the entire South Korean technology industry—the pillar of its economy—would become dependent on a foreign source (TSMC in Taiwan) for its most critical components.

This dependence on a rival company, also located in one of the most geopolitically volatile regions in the world, represents an unacceptable risk to South Korea's economic security. Therefore, Samsung's offensive is being watched from the presidential palace in Seoul with the same intensity as in its boardroom.