Samsung (NASDAQOTH:SSNLF), one of the few major logic chip manufacturers left that is still pursuing leading-edge chip manufacturing technology development, reportedly told Reuters that it "plans to triple the market share of its contract chip manufacturing business within the next five years by aggressively adding clients."

Reuters points out that Samsung "lags well behind Taiwan's TSMC (NYSE:TSM) in contract manufacturing" and cites data from IHS showing that TSMC's foundry market share was 50.6% in 2016 while Samsung's was just 7.9%.

A Qualcomm gigabit LTE module for cars, with a modem manufactured by Samsung.

Image source: Qualcomm.

This goal seems rather ambitious. Although it'd be a mistake for TSMC underestimate Samsung, I suspect that it'll be much harder for the South Korean electronics giant to achieve this goal than it's seemingly making it out to be.

Here's why.

Samsung's gain needs to be TSMC's pain

TSMC is obviously the contract chip manufacturing market leader and, right now, Samsung's only serious foundry competitor when it comes to cutting-edge manufacturing technologies (though privately held Globalfoundries has been talking a lot about re-entering the game with its upcoming 7-nanometer technology).

Samsung, of course, could try to increase its market segment share at the expense of the third-tier foundry players like United Microelectronics and Semiconductor Manufacturing International, but those vendors generally compete for business using older-generation manufacturing technologies.

Samsung seems to want to capture share in leading-edge technologies, though, and that ultimately means that the company needs to capture share from TSMC rather than one of the aforementioned smaller/less advanced chip manufacturers. 

The company has been able to beat TSMC for major contracts in the past. For example, after TSMC won the entirety of Apple's (NASDAQ:AAPL) A-series chip business for the iPhone 6, Samsung successfully re-entered the iPhone chip supply chain and produced a large portion of the A9 chips that powered the iPhone 6s.

Samsung is currently out of the iPhone 7 series of devices, and it's believed to be out of this year's models, too, but there are rumors floating around that Samsung has won some chip orders for the 2018 iPhone (though there appears to be a good argument against that being the case, as well).

Another example of Samsung getting one in on TSMC was its ability to grab Qualcomm's (NASDAQ:QCOM) leading-edge chip orders. Qualcomm used Samsung's 14-nanometer technology for the Snapdragon 820 series, and it's using Samsung's 10-nanometer technology to build its Snapdragon 835 series.

And, now, as Qualcomm's high-tier and midtier smartphone chips transition to more advanced technologies, the chipmaker seems to be using Samsung's technologies there, too.

Samsung has certainly shown that it can win leading-edge foundry business.

At the same time, though, TSMC has done very well over the last several generations. It seemingly dominated the 28-nanometer market when that technology was cutting-edge, it was able to eventually achieve leading market share with its 16nm technology (after a rocky start), and the company appears confident about its share position at both the 10-nanometer and 7-nanometer generations.

Of course, TSMC could mess up and give Samsung an opportunity to grab large amounts of share. Alternatively, Samsung could, by some miracle, manage to build technologies so superior to TSMC's that customers will be very tempted to switch over to Samsung.

However, I think considering how things have played out over the last several years, I don't think any predictions around foundry market share should be based on the premise of TSMC dropping the ball or Samsung performing miracles.

Ashraf Eassa owns shares of Qualcomm. The Motley Fool owns shares of and recommends Apple. The Motley Fool owns shares of Qualcomm. The Motley Fool has a disclosure policy.