TSMC vs Samsung: Revenue, Profit, and Margin

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This article provides a comparative analysis of several financial metrics between Taiwan Semiconductor Manufacturing Company Limited (TSMC) and Samsung Electronics.

TSMC (Taiwan Semiconductor Manufacturing Company) and Samsung are two leading players in the semiconductor industry. Both companies operate foundry business models, where they manufacture semiconductors for other companies.

TSMC focuses exclusively on this model, without designing its own chips. In contrast, Samsung runs a foundry business alongside its own semiconductor design and manufacturing, serving external clients and producing chips for its products.

Let’s look at the comparison results!

You may find related statistic of TSMC and Smaung in the following pages:

TSMC

• TSMC revenue by region: North America, Asia Pacific, EMEA, China, and Japan,
• TSMC revenue by process node: 3nm, 5nm, 7nm, 10nm and more,
• TSMC revenue breakdown: HPC, Smartphone, IoT, Automotive, etc.,
• TSMC vs Intel: R&D costs,

Samsung

• Samsung vs Apple: R&D spending, growth, and ratios,
• Samsung vs TSMC: R&D expense, growth, and ratio, and

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Definitions

To help readers understand the content better, the following terms and glossaries have been provided.

Currency Conversion: TSMC and Samsung presented their financial results in their native currencies, specifically the New Taiwan Dollar (TWD) for TSMC and the Korean Won (KRW) for Samsung.

The respective companies handled the conversion of these currencies to US dollars at the time of their earnings presentations, rather than the editors.

The exchange between the USD and the New Taiwan Dollar and South Korean Won are as follow:

1 USD = 31.51 TWD
1 USD = 1,488.73 KRW

Gross Profit: Gross profit is a financial metric representing the difference between a company’s revenue and the cost of goods sold (COGS).

It measures how efficiently a company is producing and selling its goods. The formula for calculating gross profit is:

Gross Profit = Revenue − Cost of Goods Sold (COGS)

Gross profit is a key indicator of a company’s core profitability before accounting for overhead, taxes, and other operating expenses.

It is typically used to assess a company’s production efficiency and cost management. Higher gross profit margin indicates better efficiency in producing and selling products, while lower gross profit margin may suggest issues in cost control or pricing strategies.

Operating Profit: Operating profit, also known as operating income or operating earnings, is a measure of a company’s profitability from its core business operations, excluding any income or expenses not directly related to the primary business activities.

It is calculated by subtracting operating expenses from gross profit. Here’s a breakdown of the components:

• Gross Profit: Revenue minus the cost of goods sold (COGS).
• Operating Expenses: These include selling, general, and administrative expenses (SG&A), depreciation, and other expenses related to the core operations of the business.

The formula for calculating operating profit is:

Operating Profit = Gross Profit − Operating Expenses

Operating profit provides insight into a company’s efficiency in managing its core business activities and controlling costs. It is a key metric used by investors and analysts to evaluate a company’s financial health and operational performance.

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FAQs

To help readers understand the content better, the following FAQs have been provided.

Why is TSMC having much better profit margins than Samsung?

TSMC (Taiwan Semiconductor Manufacturing Company) consistently achieves better profit margins than Samsung due to several key factors:

1. Business Model:
   • TSMC operates as a pure-play foundry, meaning it focuses exclusively on manufacturing semiconductor products for other companies based on their designs. This allows TSMC to concentrate on manufacturing efficiency and economies of scale.
   • In contrast, Samsung designs and manufactures its own chips, which involves higher research and development (R&D) costs and capital expenditures.
2. Manufacturing Efficiency:
   • TSMC is known for its cutting-edge manufacturing processes, including advanced technologies like 5-nanometer and 3-nanometer nodes. These technologies enable TSMC to produce smaller, more efficient, and powerful chips, which contribute to higher profit margins.
   • Samsung also invests in advanced manufacturing technologies, but the dual focus on both foundry services and its own product lines can dilute its manufacturing efficiency.


3. Client Base:
   • TSMC serves major clients such as Apple, Nvidia, and AMD, providing them with state-of-the-art semiconductor solutions. This strong client base ensures a steady demand for TSMC’s products and allows the company to maintain high utilization rates in its fabs, leading to better profit margins.
   • Samsung, while also serving prominent clients, has to balance its foundry services with its internal demand for chips used in Samsung-branded products.
4. Cost Management
   • TSMC’s focus on manufacturing efficiency and economies of scale allows it to manage costs effectively. By specializing in foundry services, TSMC can optimize its production processes and reduce overhead costs.
   • Samsung, on the other hand, incurs higher costs due to its integrated business model, which includes both foundry services and its own semiconductor design and manufacturing.
5. R&D Investment:
   • While both companies invest significantly in R&D, TSMC’s investments are primarily directed towards improving manufacturing processes and technologies. This targeted approach helps TSMC maintain its technological edge and achieve higher profit margins.
   • Samsung’s R&D investments are spread across multiple business units, including consumer electronics and mobile communications, which can impact its overall profit margins.

These factors collectively contribute to TSMC’s superior profit margins compared to Samsung. TSMC’s focused business model, advanced manufacturing technologies, strong client base, effective cost management, and targeted R&D investments enable it to achieve higher profitability in the semiconductor industry.

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Insight & Summary of Financial Metrics Comparison between TSMC and Samsung

The following analysis consolidates the trends observed across the comparison between TSMC and Samsung in several financial metrics for the 2018–2025 period.

• The revenue comparison is structurally misleading without context — Samsung is 2.3x larger by revenue but a fraction of TSMC’s profitability. Samsung’s 3-year average revenue of $217.9B dwarfs TSMC’s $94.0B, but this gap reflects Samsung’s diversified conglomerate structure — it encompasses semiconductors (Memory, System LSI, Foundry), consumer electronics (smartphones, TVs, appliances), and display panels, compared to TSMC’s pure-play advanced semiconductor foundry model. Samsung’s revenue advantage has in fact narrowed significantly over the period: TSMC’s revenue grew 260% from $33.7B (2018) to $121.4B (2025), while Samsung’s fluctuated between $197.7B and $244.4B — effectively flat on a multi-year basis. The convergence is striking: TSMC’s revenue growth rate since 2018 is among the fastest of any $50B+ technology company globally.

• TSMC’s gross profit margin advantage is structural, persistent, and widening. TSMC’s gross margin expanded from 48.3% in 2018 to 59.9% in 2025 — a 1,160 basis point improvement over seven years — with a 3-year average of 56.8%. Samsung’s gross margin, by contrast, ranged from 30.3% (2023 trough) to 45.7% (2018 peak) and averages 35.9% over the latest three years. The gap has widened from approximately 250 basis points in 2018 to approximately 2,050 basis points in 2025. This is not a cyclical divergence — it is a structural reflection of TSMC’s pricing power at the leading edge of advanced semiconductor manufacturing, where it has no direct competitor at N3 and N2 nodes. Samsung’s lower gross margins reflect its vertical integration (lower-margin Memory dominates its semiconductor revenue) and the commodity-pricing pressures in DRAM and NAND that characterised 2022–2023.

• The operating margin comparison makes the profitability gap most explicit. TSMC’s operating margin averaged 46.4% over 2023–2025 and has expanded to 50.8% in 2025 — a level that places it among the most profitable large-cap technology companies globally. Samsung’s operating margin collapsed to 2.5% in 2023 — its lowest in the dataset — driven by catastrophic memory oversupply and pricing compression, before recovering to 10.9% in 2024 and 14.8% in 2025. The 3-year average of 9.4% for Samsung versus TSMC’s 46.4% is a 3,700 basis point gap. For perspective: TSMC’s operating profit in 2025 ($61.7B) exceeded Samsung’s total revenue in 2023 ($198.2B) — a remarkable illustration of how efficiently TSMC converts revenue to earnings relative to a much larger enterprise.

• Samsung’s 2023 operating profit crisis is the defining event of the comparison. Samsung’s operating profit fell from $33.6B in 2022 to just $5.0B in 2023 — a -85% decline — as DRAM and NAND prices collapsed amid global inventory destocking and AI infrastructure build-out redirecting demand away from consumer memory. TSMC, by contrast, saw operating profit decline only modestly from $36.5B (2022) to $30.1B (2023, -17.5%), as logic semiconductor demand was more resilient and TSMC maintained pricing discipline throughout the cycle. The asymmetry of the 2023 downturn — essentially trivial for TSMC, near-existential for Samsung’s semiconductor earnings — crystallises the fundamental difference between a foundry business (fee-for-service, volume-driven) and a memory business (commodity, heavily cyclical).

• TSMC’s net profit margin is now one of the highest in global technology. TSMC’s net profit margin averaged 41.5% over the latest three years, reaching 44.5% in 2025. Samsung’s net margin averaged 10.4% over the same period — itself respectable for a company of its scale, but representing less than a quarter of TSMC’s profitability rate. TSMC’s net profit in 2025 ($54.0B) exceeds Samsung’s entire operating profit ($34.8B) in the same year. In absolute net profit terms, the two companies have converged meaningfully: TSMC averaged $39.4B versus Samsung’s $23.0B — a gap that will likely continue to narrow as TSMC’s revenue compounds and Samsung’s memory cycle partially recovers.

• The divergence in business model quality is the central investment insight. TSMC operates in an oligopolistic market position at the leading edge of semiconductor manufacturing — pricing is set largely by demand, not by competition, because Intel and Samsung cannot match TSMC’s yield, process maturity, and customer ecosystem at N3/N2 nodes. Samsung’s semiconductor business is partially foundry (competing with TSMC) and partially memory (commodity, highly cyclical). The memory business produces Samsung’s revenue scale but also its earnings volatility. TSMC’s consistent 40–50% operating margins are structurally protected; Samsung’s 2.5–18.5% operating margin range over this period is inherently cyclical and will oscillate with memory pricing dynamics indefinitely.

The table below combines all key comparison metrics between TSMC and Samsung into a single view for the latest three fiscal years.

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TSMC vs Samsung: Revenue

TSMC and Samsung report their financial results in their native currencies. The conversion of these currencies to USD was carried out by the respective companies, rather than the editors.

The exchange rate between the USD and the New Taiwan Dollar and South Korea Won can be found here: currency exchange.

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TSMC vs Samsung: Gross Profit and Margin

The definition of gross profit is available here: gross profit.

TSMC and Samsung report their financial results in their native currencies. The conversion of these currencies to USD was carried out by the respective companies, rather than the editors.

The exchange rate between the USD and the New Taiwan Dollar and South Korea Won can be found here: currency exchange.

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TSMC vs Samsung: Operating Profit and Margin

The definition of operating profit is available here: operating profit.

TSMC and Samsung report their financial results in their native currencies. The conversion of these currencies to USD was carried out by the respective companies, rather than the editors.

The exchange rate between the USD and the New Taiwan Dollar and South Korea Won can be found here: currency exchange.

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TSMC vs Samsung: Net Profit and Margin

TSMC and Samsung report their financial results in their native currencies. The conversion of these currencies to USD was carried out by the respective companies, rather than the editors.

The exchange rate between the USD and the New Taiwan Dollar and South Korea Won can be found here: currency exchange.

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Credits and References

1. All financial figures presented were obtained and referenced from TSMC’s and Samsung annual reports published on the companies’ investor relations pages: TSMC Annual Reports and Samsung Investor Relations.

2. Pexels Images.

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Disclosure

We may use artificial intelligence (AI) tools to assist us in writing some of the text in this article. However, the data is directly obtained from original sources (usually the quarterly and annual reports) and meticulously cross-checked by our editors multiple times to ensure its accuracy and reliability.

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