Chip is originally synonymous with high technology, but now it is like a hot potato in international trade.

Tencent and Samsung, such giants, were pulled by the United States a few years ago and ran there to build factories. But now they want to turn around and come back. This big cake in the Chinese market is not so easy to distribute to them. Think about it, how straightforward it was when Huawei was cut off, but now I regret it, and the doors are closed?

Let me talk about TSMC's trip to the United States first. On May 15, 2020, TSMC announced that it would invest $12 billion in Phoenix, Arizona to build a factory and transfer 3-nanometer and 5-nanometer production lines.

It was originally planned to start production in 2024, but it was delayed until the first half of 2025 that it barely started high-volume production. The first factory will be trial production on April 8, 2025, and the second factory will be postponed to 2027 or 2028.

Why is delayed? Labor shortage, union trouble, and high costs. In the first half of 2025, the Arizona subsidiary had a net profit of US$150.1 million, which sounds good, but compared with the efficiency of Taiwan's main island, overseas factories suffered losses throughout 2024.

TSMC's total revenue exceeded US$30 billion in the second quarter of 2025, but China's market share dropped from 16% to 9%. What does this mean? Customer orders have shifted to local suppliers.

Taipei's Nanjing factory originally exempted the production of 16-nanometer chips by relying on US equipment. On September 2, 2025, the United States revoked its end-user license. From December 31, each device must apply for a license case by case. Production efficiency will definitely decrease and inventory pressure will be greater.

Samsung's path is similar. On November 23, 2021, Samsung announced that it would invest $17 billion to build a factory in Taylor, Texas. It was originally completed in 2024, but now it is pushed to the end of 2025 or even 2026.

Reason? There are few customer orders, and 90% of the factory is built but idle. Reports on July 4, 2025 showed that the delay in completion gave Samsung a headache. On July 30, Lee Jae-yong admitted that demand was weak and the stock price swayed.

Samsung's chip business's profit plummeted by 94% in the second quarter of 2025, and the main reason for the hindered sales to China. The factory in Xi'an and Suzhou was revoked on August 30, 2025, and the equipment import was blocked.

The chips in the warehouse were piled up and couldn't be sold, and the sales team was in a hurry. The two companies invested so much money in the United States, but the orders did not keep up and the Chinese market was lost again.

Recalling on May 15, 2019, the United States included Huawei on its entity list and prohibited companies using American technology from supplying. TSMC and Samsung did not hesitate at the time. Starting from September 15, 2020, TSMC stopped supplying Huawei 7-nanometer chips, and Samsung stopped supplying memory chips.

Huawei's mobile phone production has dropped significantly, and China's chip import demand is already large, and now local companies are accelerating their own research. Made in China 2025 plans, the original target of semiconductor self-sufficiency rate in 2025 is 70%, but the actual self-sufficiency rate may only reach 30%, but the equipment self-sufficiency rate is expected to be 50%.

China's chip production capacity has expanded rapidly, with SMIC's revenue in the second quarter of 2025 USD 2.2 billion, a year-on-year increase of 16.2%. Local suppliers seized the market, and TSMC and Samsung's share naturally shrank.

On March 4, 2025, TSMC invested an additional $65 billion to support 40,000 construction positions. But what about reality? The Phoenix City factory has a shortage of water resources. On August 27, 2025, the cost has been increased.

Lee Jae-yong promoted Samsung to expand from storage to logic chips, investing tens of billions in advanced processes in the 2020s. The Kertaylor factory received a subsidy of US$474.5 million on December 20, 2025, but production was delayed and equipment debugging was stuck in insufficient customers.

The global semiconductor landscape is changing. China ranks first in the world in terms of chip imports, but now the self-sufficiency rate has increased and the dependence has been reduced. TSMC's second quarter 2025 revenue was US$30.24 billion, with a market share of 70.2%, while Samsung dropped to 7.3%.

The gap widened to 62.9 percentage points. The two companies want to return to the local market, but the US bill is strictly managed and there is a high price to leave. Chinese consumers and enterprises will not turn back easily as they turn to local chips.

The "rebellion" between TSMC and Samsung is actually trying to get rid of US restrictions and return to China's orders. But if you lose trust and lose market share, how can you sell regret medicine?

The chip industry was originally a win-win cooperation, but now it has become a zero-sum game. TSMC and Samsung were the first to take the sidelines, but now they have suffered. China promotes self-development, with the self-sufficiency rate of semiconductor equipment in 2025 being 50%, with the largest production capacity in the world.

The revenue of the two companies has declined, overcapacity and inventory backlog. What about the future? TSMC Nanjing factory applied for equipment one by one, and the efficiency was low. Samsung chip sales continue to decline, and the global landscape is reshaping. China will not easily accept these companies that turn to at critical moments, and the door to cooperation is narrow.

The dilemma between Samsung and TSMC exposes the fragility of the chip supply chain. The US Chip Act was passed on August 9, 2022, providing a subsidy of US$52.7 billion, which can be accompanied by technical document requirements, making companies confused. After the two companies transferred their technology, they found that the subsidies were not that easy to obtain.

Global chip revenue in the second quarter of 2025 was US$41.7 billion, an increase of 14.6%, but the Chinese market turned to self-production and reduced import dependence. TSMC ADR's stock price fell 1.29% on September 3, 2025, and then stabilized. However, in the long run, China's share dropped to 9%, which has a great impact.

Think about the beginning, TSMC developed rapidly thanks to China's support. Now betrayal, income has dropped sharply. The same applies to Samsung. Chips are not simple transactions, but involve national security. The two companies are now awakening and want to adjust their strategies, but the Chinese market has changed.

Local suppliers fill the gaps, and although the self-sufficiency rate target has not been fully achieved, the progress has been obvious. In the future, the center of gravity of global semiconductors will move eastward and China will have a heavier role. The lesson from TSMC and Samsung is that companies are sandwiched among major powers, and it is difficult to turn over if they choose the wrong side.

The United States revoked its exemption, and TSMC's Nanjing factory has little impact, but its signal is strong: restricting China's chip upgrades. The production capacity of the two companies in China is locked and cannot be expanded.

China only has 3% of the total production capacity of TSMC, but it has great symbolism. In order to subsidize the factory, the subsidy conditions are now harsh and I regret it. China will not forgive such fictional behavior, and the market door is tight.

Conclusion:

The chip war is not over. The "rebellion" between TSMC and Samsung is actually a passive adjustment. But time is wrong, and the opportunity slips away. China's road to self-improvement is stable, and the two companies have to pay for the original decision. The world is watching the excitement, but the company is actually losing money. If you lose your trust, it will be difficult to recover.