Samsung’s overall chip business achieved a record-breaking operating profit in Q1 2026, and that’s only going to go up as the global chip buyers are turning to Samsung Electronics for manufacturing future chips, as reported by Nikkei Asia. The list includes big tech giants such as AMD, Google, NVIDIA-backed Groq, Tesla, and BYD, all of which are looking to diversify their chip production to Samsung as demand continues to soar beyond TSMC’s available capacity.
AMD is in talks with Samsung about manufacturing future CPUs starting in 2028. Google is also reportedly expanding ties with the South Korean giant to produce its next-generation Axion processors, set to launch around 2028, and has asked Samsung to build part of its key Tensor Processing Units (TPUs) for AI computing workloads as early as 2028.
BYD, the world’s largest electric vehicle maker, is also in discussion with Samsung for its next-generation autonomous driving chips, while Tesla has already confirmed that its next-generation AI6 chip will be produced at Samsung’s Texas facility. NVIDIA-backed Groq, which develops language processing units, is already using Samsung’s foundry for chip production and may also use it for its next version of specialized AI chips.
Samsung is witnessing a sharp rise in manufacturing inquiries from both existing and new clients, people familiar with the matter told Nikkei Asia. Companies are adopting dual-sourcing strategies, splitting orders between TSMC and Samsung, rather than relying on the foundry to reduce supply-chain risk.
With tech giants like Google, Tesla, BYD, and AMD aggressively securing what’s left of TSMC’s capacity, smaller companies are left with little choice but to look elsewhere, making Samsung their strongest alternative.
Samsung’s chip business gains momentum as demand outpaces TSMC
There are only three companies in the world that can produce advanced chips: TSMC, Samsung, and Intel.
TSMC makes the most advanced chips and therefore dominates the market, followed by Samsung, which has struggled to win over major outside customers, but things have started to shift. While Intel is a massive company, its contract manufacturing business is still in its infancy regarding external scale.
Due to unprecedented demand for AI and high-performance chips, TSMC’s production capacity is unable to keep pace with the demand, forcing companies to diversify orders across multiple foundries, and that’s where Samsung shines. It’s emerging as the main alternative for companies that are not able to secure capacity at TSMC and for those who want to diversify to ensure it’s not affected by the supply-chain crisis.
Also read:
1. Huawei aims to launch lithography equivalent to TSMC’s 1.4nm by 2031 in a major defiance of U.S. sanctions
2. Apple turns to Intel to manufacture its next-gen MacBook Neo chips as TSMC supply tightens
3. TSMC’s 2nm supply shortage forces smartphone brands to save the best for top-end models amid growing DRAM crisis
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