As the global semiconductor race heats up, fueled by the rise of AI and advanced computing, Taiwan Semiconductor Manufacturing Company (TSMC) has emerged as the clear leader with its cutting-edge technology and dominant market share. The projections suggesting TSMC will generate US$160 billion in revenue in 2024, producing about 90% of the world’s most advanced semiconductors.
However, one notable absence from this arena is Samsung, the South Korean electronics giant that has historically been a fierce rival to TSMC. The head of its semiconductor division recently admitted that their foundry technology is “one or two years behind TSMC’s,” though he ambitiously promised to overtake TSMC by 2028.
Now, Korean government is pouring all the resources to help the local semiconductor industry. Some voices suggest that Samsung should cooperation with Taiwan.
In a striking display of industry solidarity, Taiwan’s semiconductor sector has a clear tacit agreement that collaboration with South Korean giant Samsung is off the table. This stance is rooted in a complex history of distrust and alleged betrayal that dates back to the early 2000s.
Samsung’s Past Betrayals and their “Kill Taiwan” grand plan
The feud between Taiwanese high tech manufacturing industry and Samsung stems from events in the LCD panel industry nearly two decades ago. In 2010, several Taiwanese companies, including AU Optronics and Chimei InnoLux, were fined around $856 million by the European Commission for participating in a price-fixing cartel. But that’s not all, the accusation got worse when it reached USA.
The LCD price-fixing case took a controversial turn with what some Taiwanese industry insiders referred to as Samsung’s “Kill Taiwan” plan. In 2006, when the U.S. Department of Justice began investigating Asian LCD manufacturers for antitrust violations, Samsung quickly turned state’s witness and provided authorities with meeting records and communications that implicated Taiwanese companies in price-fixing schemes. However, Taiwanese executives argued that Samsung had initiated these pricing discussions and then framed its competitors. This strategy allowed Samsung to escape fines while several Taiwanese managers faced jail time in the U.S.
The move sparked outrage in Taiwan’s tech community. Terry Gou, chairman of Foxconn, expressed anger and a determination to oppose Korean manufacturers, stating, “If the No. 1 and No. 2 makers did not lead in fixing prices, would Taiwan’s No. 3 and No. 4 carry any weight?” By 2010, seven panel makers had pleaded guilty and paid $890 million in fines, with 17 senior executives sentenced to prison terms and fines. This incident left a lasting scar on Taiwan-Korea business relations, particularly in the electronics sector.
Trust Deficit and Industry Solidarity
The LCD panel incident created a deep-seated distrust that has carried over into the semiconductor industry. A senior executive at a leading Taiwanese chip manufacturer, speaking on condition of anonymity, stated, “The wounds from the LCD panel debacle are still fresh. We cannot risk our technological edge by partnering with a company that has shown it will not hesitate to throw partners under the bus for its own gain.”
This sentiment is echoed across Taiwan’s tech circles. Dr. Lin Chih-sen, an industry analyst at the Taiwan Institute of Economic Research, explains, “There’s a strong sense of solidarity within Taiwan’s semiconductor ecosystem. The idea of collaborating with Samsung is seen not just as a business risk, but as a betrayal of industry values.”
“Samsung, no, thank you”
As Samsung struggles to catch up in the semiconductor race, calls for cooperation with Taiwan have emerged from some quarters. However, these pleas are scorned by the Taiwanese.
The situation underscores the importance of trust in international technology collaborations. As the global demand for advanced semiconductors continues to grow, the industry watches with interest to see how this standoff will impact the future of chip manufacturing.
Taiwan’s semiconductor industry is strong and self-sufficient. They do not need Samsung and will never turn to Samsung for cooperation. South Korea and Samsung must face its challenges alone. As one industry insider put it, “In the world of high-tech manufacturing, reputation and trust are as valuable as the chips we produce. Some things, once broken, are hard to repair.”
