Samsung Electronics is receiving a growing volume of advanced chip production requests from BYD, Google, AMD, and Tesla, according to sources cited by Nikkei Asia. The common thread running through these requests is not a sudden preference for Samsung’s foundry over TSMC’s, it is that TSMC’s leading-edge capacity is increasingly strained by the relentless demand for AI infrastructure, leaving customers with fewer options for advanced-node production.
The development is significant for several reasons. It signals that the AI infrastructure build-out has become large enough to create genuine capacity constraints at the world’s most advanced chip manufacturer. It positions Samsung as a beneficiary of a structural shift rather than a competitive win. And it draws BYD, an electric vehicle and battery company, into a conversation that has until recently been dominated by cloud hyperscalers and semiconductor designers.
TSMC’s Capacity Ceiling
TSMC has spent the past two years expanding aggressively, with new fabs under construction in Arizona, Japan, and Germany, and plans to mass-produce 2nm chips by late 2025. But the scale of demand from AI customers led by Nvidia, Apple, and a growing roster of hyperscalers building custom silicon has consistently outpaced the company’s ability to add capacity. The result is a queue that stretches months into the future for the most advanced nodes, leaving customers who need leading-edge production on shorter timelines with limited alternatives.
Samsung is the primary alternative with the process technology required to absorb that overflow. The company has been working to close the yield gap with TSMC, which has historically made its advanced nodes less attractive to customers, and the current capacity crunch at TSMC gives Samsung an opportunity to demonstrate its capabilities to customers who might not otherwise have considered it.
TrendForce has reported that Samsung Foundry is in discussions with AMD for 2028 CPU production, while TechSpot has noted that Samsung is also in conversations with Nvidia, extending the list of potential customers beyond the four named in the Nikkei report.
BYD’s Chip Ambitions
The inclusion of BYD in this picture is particularly notable. The Shenzhen-based automaker has been on a sustained push to reduce its dependence on external chip suppliers, investing heavily in its own semiconductor design capabilities and seeking manufacturing partnerships that give it more control over its supply chain. Advanced-node chips are central to BYD’s next-generation driver assistance and in-vehicle AI systems, and the company’s scale, it is the world’s largest electric vehicle manufacturer by volume, gives it the purchasing power to be taken seriously as a foundry customer.
BYD’s move toward Samsung also reflects a broader trend among Chinese technology companies of diversifying their chip manufacturing relationships in response to the uncertainty created by US export controls. While TSMC remains the preferred partner for the most advanced nodes, the political risk associated with over-reliance on a Taiwan-based manufacturer has become a more prominent consideration in Chinese boardrooms.
What This Means for the AI Supply Chain
The capacity dynamics playing out between TSMC and Samsung have direct implications for the pace at which AI infrastructure can be built. If leading-edge foundry capacity becomes a genuine bottleneck, rather than just a planning constraint, the companies best positioned to navigate that bottleneck will be those with diversified manufacturing relationships and the ability to design chips that can be produced across multiple process nodes.
For Samsung, the current moment represents an opportunity to rebuild its foundry reputation after several years in which yield problems and customer defections raised questions about its ability to compete at the frontier. Whether it can convert the current influx of requests into long-term customer relationships will depend on execution, specifically, on whether it can deliver the yield rates and production consistency that customers moving from TSMC will expect.
The broader picture is of an AI hardware supply chain straining under demand that was not anticipated even two years ago. EastFrontier has previously reported on how Samsung’s internal challenges have created openings for Chinese chipmakers. The current development suggests the dynamic is more nuanced: Samsung is simultaneously under pressure from Chinese competitors on one side and being pulled toward greater relevance by TSMC’s capacity limits on the other.
Geopolitics and the Taiwan Risk Premium
The capacity dynamics at TSMC cannot be separated from the geopolitical context in which they are playing out. Taiwan’s status as the world’s dominant producer of advanced chips has long been identified as a strategic vulnerability — both for the companies that depend on TSMC and for the governments that rely on those companies. The concentration of leading-edge chip production in a single location, amid the political tensions surrounding the Taiwan Strait, has prompted sustained efforts by governments and companies alike to diversify the geography of advanced chip manufacturing.
For BYD, the decision to explore Samsung as a manufacturing partner is partly a response to that geopolitical risk. A company of BYD’s scale, with ambitions that extend well beyond electric vehicles into AI-enabled transportation, energy storage, and consumer electronics, cannot afford to have its most critical components produced at a single point of potential disruption. Samsung’s fabs in South Korea and, increasingly, in the United States provide a degree of geographic diversification that TSMC’s Taiwan-centric model does not.
The broader implication is that the AI infrastructure build-out is not just creating capacity constraints, it is accelerating a structural shift in how the global chip supply chain is organized. Companies that were once content to rely on TSMC for their most advanced chips are now actively building relationships with alternative manufacturers, not because TSMC is inadequate but because the concentration risk has become too large to ignore. Samsung is the primary beneficiary of that shift, but the dynamic is likely to persist regardless of how the current capacity crunch resolves.