Samsung Electronics Co. expanded its share of the global foundry market in the fourth quarter, slightly narrowing down the gap with the industry's leader TSMC, a report showed Tuesday.

The South Korean chipmaker's share rose 1.1 percentage points to reach 18.3 percent in the October-December period, according to market analyst firm TrendForce, while the dominant market player Taiwan's TSMC shed 1 percent to 52.1 percent.

Samsung's foundry business grew 15.3 percent from the previous quarter, compared with TSMC's 5.8 percent on-quarter growth.

The report said Samsung was the only contract chip manufacturer among the industry's top five players to increase its market share on-year in the fourth quarter.

TrendForce attributed Samsung's growth to "the gradual completion of new advanced 5/4nm process capacity and the mass production of new flagship products from major client Qualcomm."

It said, however, the slower ramp-up of advanced process capacity is expected to erode overall profitability for Samsung, and one of its top priorities should be "improving advanced process capacity and yield."

During a conference call following the fourth-quarter earnings result in late January, Samsung said its foundry business logged record-high revenue in the quarter, without providing detailed figures.

But the company said its profitability decreased a bit from the third quarter "due to a rise in costs related to ramping up advanced process nodes."

Overall, the global output from the world's top 10 foundries reached $29.55 billion in the three months ended December, up 8.3 percent from the third quarter, according to TrendForce.

It projected the industry would continue growth momentum in the first quarter of this year partly thanks to rising wafer prices. But the first-quarter growth rate will be down slightly from the previous quarter due to fewer working days with the long Lunar New Year holiday in the Greater China region and annual maintenance work by some foundries, it said.

Competition in the foundry business has heated up amid the global shortage of semiconductors that has crippled production of cars and consumer appliances.

Samsung is set to build a new chip fabrication plant in Taylor, Texas, to expand its foundry business and pump up chip production. Construction will begin sometime during the first quarter, with the mass production to begin in the latter half of 2024.

Intel acquired Israeli chip manufacturer Tower Semiconductor at $5.4 billion last month to gain more dependence from overseas chip contract manufacturers. The US chipmaker is building chip factories in Arizona and Ohio.

TSMC is also building a plant in Arizona and is said to be considering constructing more plants in the US (Yonhap)