[News] Samsung’s Foundry Business Reportedly Struggles with Losses behind Soaring Profits in Q2

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In spite of its skyrocketing profit in Q2 thanks to the strong AI demand for memory chips, Samsung Electronics might be still struggling with losses in its foundry business, according to reports by ijiwei and Technews.

Citing Korean media, the reports indicate that Samsung’s foundry business is expected to face operating losses amounting to several trillion Korean won in 2024. The reports note that one of Samsung’s major challenges may lie in securing major foundry clients, as improving its yield rates and technologies in advanced nodes remains the company’s top priority.

Samsung posted better-than-expected revenue and profit numbers in Q2, as its revenue grew 23% YoY to 74.07 trillion won (USD 53.45 billion). Its operating profit, on the other hand, soared 1,462% YoY to 10.44 trillion won. However, the semiconductor giant didn’t disclose individual data for the foundry and LSI businesses respectively, but only providing the performance of the Device Solutions (DS) division as a whole.

In its press release, Samsung attributed the robust Q2 performance of its DS division to the market recovery driven by HBM, conventional DRAM and server SSDs. The move has brought up concerns on whether the foundry business is still grappling with losses.

The reports, citing Korean sources, indicate that Samsung’s semiconductor business (excluding the memory division) might have suffered a loss of nearly 300 billion won during the quarter. In addition, Samsung Securities predicts that the non-memory division recorded an operating loss as much as 457 billion won.

An earlier report by Business Korea noted that as the demand for 3nm has been rising, big techs, including NVIDIA, AMD, Qualcomm, MediaTek, Apple and Google, tend to allocate their orders to TSMC. Even Intel’s Lunar Lake, which is expected to make debut in September, is said to be manufactured with TSMC’s 3nm. The strong demand has reportedly prompted TSMC to raise the price of its 3nm process by over 20%.

Thus, the reports by ijiwei and Technews suggest that Samsung’s top priority would be to attract major clients for its foundry business. If Samsung can improve the yield rate of its 3nm GAA (Gate-All-Around) technology in a timely manner, it could potentially increase its order volume and market share by offering more competitive pricing.

On the other hand, the reports note that Samsung’s foundry business needs to shift its focus from the smartphone sector to the high-performance computing (HPC) segment, which means Samsung will need to apply technologies such as Backside Power Delivery Network (BSPDN) to enhance product performance and competitiveness. In response, Samsung plans to introduce BSPDN technology potentially ahead of schedule, aiming to boost its competitiveness when it begins mass production of its 2nm process technology in 2025.

 

Read more

• [News] Samsung to Intensify Efforts for Capturing Intel’s Advanced Packaging Orders Shifting from TSMC
• TrendForce: Top 10 Global Foundries at 4.3% QoQ Drop in 1Q24 Revenue as SMIC Climbed to 3rd Spot

(Photo credit: Samsung)