The semiconductor foundry industry appeared to have a clear hierarchy for years. The first position was firmly held by Taiwan’s TSMC, Samsung was in a distant but secure second place, and China’s SMIC was an ambitious challenger that was constrained by technology restrictions and sanctions.
That picture is beginning to change.
Despite TSMC’s continued dominance of the global foundry market, the competition for second place is becoming more intense. China’s Semiconductor Manufacturing International Corporation (SMIC) has considerably increased its revenue and market share in comparison to Samsung Foundry, according to recent industry data from the first quarter of 2026. The development underscores the rapid advancement of China’s semiconductor ecosystem, despite the years of export controls and restrictions on advanced manufacturing equipment.
During the first quarter of 2026, TSMC controlled 72.3% of the global market and generated approximately $35.9 billion in foundry revenue, according to the most recent industry rankings. Samsung maintained its second-place position with a 6.5% market share and $3.2 billion in revenue. Nevertheless, SMIC was not far behind, attaining a 5.1% market share and generating $2.5 billion in revenue. In market share measures, the disparity between Samsung and SMIC has been reduced to a mere 1.4 percentage points.
The data indicates that the semiconductor industry’s second-place competition may emerge as one of the most significant topics in the coming years.
A CLOSING GAP
The most noteworthy feature of the most recent data is not TSMC’s dominance. The Taiwanese multinational corporation has been bolstering its market position for years as a result of the substantial demand for high-performance computing circuits, advanced processors, and AI accelerators.
However, the convergence between Samsung and SMIC is the more interesting trend.
Samsung appeared to have a secure advantage over the Chinese foundry just a few years ago. Samsung had access to advanced process technologies, significant global customers, and cutting-edge manufacturing equipment. In contrast, SMIC was generally perceived as a mature-node manufacturer that predominantly catered to the domestic Chinese market.
The current situation is markedly different.
Many analysts anticipated that SMIC’s first-quarter revenue of $2.5 billion would be significantly lower than Samsung’s $3.2 billion. Although the Chinese company is subject to severe technology restrictions, industry observers have increasingly observed that it is gaining market share.
Samsung continues to maintain a major advantage; however, the trajectory is evident. SMIC is growing, while Samsung’s foundry business continues to face challenges from both TSMC above and Chinese competitors below.
How China Built a Semiconductor Challenger
SMIC’s rise did not happen overnight.
Beijing has made major investments in domestic semiconductor manufacturing for more than a decade as part of a broader initiative to decrease its reliance on foreign technology. The endeavor experienced a significant acceleration following the imposition of U.S. sanctions that restricted access to sophisticated semiconductor manufacturing equipment and targeted Chinese technology firms.
However, the restrictions did not impede development; rather, they compelled China to increase investment throughout the entire semiconductor supply chain.
The strategy’s focal point was SMIC.
Currently, the organization is the largest contract chip manufacturer in mainland China and is the cornerstone of the nation’s semiconductor aspirations. A rapidly expanding domestic customer base, robust government support, and an increasing demand from Chinese technology companies seeking local manufacturing partners have all contributed to the company’s success.
SMIC has acquired access to a vast and expanding market that is largely devoid of foreign competition as Chinese smartphone manufacturers, AI companies, automotive suppliers, and industrial technology firms prioritize domestic procurement.
The Huawei Effect
The relationship between SMIC and Huawei has been one of the key components contributing to its growth.
The unexpected release of Huawei’s Mate 60 smartphone in 2023 served as evidence that China had made much greater strides in semiconductor manufacturing than many observers had believed was feasible. SMIC produced the processor domestically using advanced 7-nanometer technology, which was included in the device.
The partnership between Huawei and SMIC has since been further developed.
According to reports, the two organizations are collaborating on the development of next-generation semiconductor designs and advanced manufacturing technologies. Huawei’s semiconductor requirements have effectively established a large and consistent demand for SMIC’s most sophisticated production lines.
This partnership has facilitated the technological development of SMIC and has concurrently fortified the semiconductor ecosystem in China.
Samsung’s Difficult Position
The challenge for Samsung is not that it has fallen behind technologically.
Samsung continues to be one of the few organizations worldwide that are capable of producing state-of-the-art processors. The company is a critical supplier of memory processors, AI accelerators, and advanced semiconductor products and continues to develop advanced 2-nanometer technologies. Samsung’s foundry business has also demonstrated signs of recovery as a result of the growing demand for advanced semiconductor technologies.
The issue is strategic.
TSMC continues to attract the majority of the world’s largest chip designers and dominates the highest-value segment of the market. Nvidia, Apple, AMD, Broadcom, and numerous AI innovators depend heavily on TSMC’s manufacturing capabilities. TSMC’s position has been further fortified by the large demand for AI.
In parallel, Samsung is facing downward pressure from Chinese foundries, which are becoming more competitive in mature and intermediate process technologies.
This establishes a challenging environment in which Samsung must simultaneously safeguard its market share from swiftly expanding Chinese competitors and defend its premium technological position against TSMC.
Revenue vs. Technology
It is crucial to distinguish between technological parity and market share gains, despite SMIC’s development.
Samsung maintains a major advantage over SMIC in terms of its cutting-edge manufacturing capabilities.
Despite SMIC’s demonstration of the capacity to manufacture sophisticated circuits using advanced manufacturing techniques, the company continues to encounter obstacles regarding access to extreme ultraviolet lithography equipment. The efficiency, yields, and performance that TSMC and Samsung accomplished are significantly more challenging to match due to these restrictions.
Most industry analysts believe that SMIC’s most advanced manufacturing processes are still behind the most advanced technologies available from TSMC and Samsung.
Nevertheless, revenue leadership and technological leadership are not always synonymous.
The latest process nodes are not necessary for the majority of processors that are used in automobiles, industrial equipment, networking systems, consumer electronics, and a multitude of other products. These mid-range and mature technologies present a big market, and it is in this sector that Chinese foundries are becoming more competitive.
China’s Semiconductor Ecosystem Is Expanding
The emergence of additional Chinese semiconductor manufacturers is another factor that is advantageous to SMIC.
The domestic production capabilities of the nation are being fortified by the efforts of numerous Chinese chipmakers to transition to increasingly sophisticated manufacturing nodes. The rise of these companies means that SMIC is no longer advancing alone. Rather, it is becoming a component of a more extensive national initiative to establish a comprehensive semiconductor supply chain that is competitive on a global scale.
The expansion of China’s manufacturing base will provide domestic technology firms with a greater number of options for procuring critical chips within the country. This trend is expected to continue to intensify as geopolitical tensions continue to promote technological self-sufficiency.
As the demand for AI circuits, automotive semiconductors, industrial processors, and communications hardware continues to increase, that ecosystem approach could become increasingly significant.
The AI Boom Is Changing Everything
Artificial intelligence has become one of the biggest forces reshaping the semiconductor industry.
The unprecedented demand for sophisticated semiconductors has been generated by the explosive growth of AI data centers, machine learning systems, and cloud computing infrastructure. The ripple effects of this trend are being felt throughout the entire industry, although TSMC has benefited the most.
Customers are in search of additional manufacturing alternatives as the value of their leading-edge capacity increases. Additionally, governments worldwide are striving to improve the resilience of semiconductor supply chains.
The AI growth has only served to reinforce China’s conviction that semiconductor self-sufficiency is a strategic necessity. SMIC and other Chinese foundries will have the opportunity to capitalize on the anticipated surge in demand for domestically produced semiconductors as Chinese AI companies continue to expand.
What Happens Next?
The latest market-share figures do not indicate that Samsung is on the brink of losing its status as the world’s second-largest foundry.
Samsung continues to generate a higher amount of revenue than SMIC, maintains relationships with significant global customers, and possesses more advanced manufacturing capabilities.
However, the trend is impossible to ignore.
SMIC has evolved from a regional semiconductor manufacturer to a major global competitor. Despite lacking access to some of the most advanced manufacturing tools available to its competitors, as well as facing sanctions and technology restrictions, the company is still expanding.
In the interim, Samsung finds itself caught between the rapidly expanding semiconductor sector in China and the overwhelming leadership of TSMC.
The global semiconductor rankings may be reshaped by SMIC’s rise or whether Samsung can solidify its position as the world’s second-largest foundry in the years ahead.
One thing is certain: the contest for second place is no longer a foregone conclusion. The global semiconductor landscape is beginning to reflect the fact that China’s largest chipmaker is catching Samsung at a quicker pace than most of the industry expected.
The conflict between Samsung and SMIC has the potential to become one of the most prominent technology stories of the decade if current trends persist. The implications of what was once an unassailable lead are now narrowing, and they extend far beyond corporate earnings. The result will have a major impact on the balance of power in one of the world’s most strategic industries, as well as the development of AI, technological sovereignty, and global supply chains.