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)

The National Bureau of Statistics of China released the CPI and PPI data on August 9. The Consumer Price Index (CPI) for July increased by 0.5% year-on-year, higher than the 0.2% growth in the previous month and above the market expectation of 0.3%. This marks the six consecutive months of positive growth. The increase was primarily driven by rising food prices due to weather conditions, which accounted for approximately 50% of the CPI’s annual growth in July. Excluding the relatively volatile food and energy prices, the core CPI rose by only 0.4% year-on-year, down from 0.6% in the previous month.

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On the other hand, the Producer Price Index (PPI) for July decreased by 0.8% year-on-year, matching the decline of the previous month and performing better than the market expectation of -0.9%. However, this marks the 22nd consecutive month of contraction. According to Dong Li-juan, a statistician at the National Bureau of Statistics, the decline was mainly due to weak market demand and falling international commodity prices.

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Overall, the domestic demand in China remains weak. Although the Chinese government committed to revitalizing domestic demand during the 3rd Plenary Session and the Politburo meeting in July, so far, the government has only lowered the Loan Prime Rate (LPR) and has not introduced detailed or large-scale fiscal stimulus measures. This presents a significant challenge to achieving the annual GDP growth target of 5% through increased domestic demand.

According to a report from Korea media outlet Yonhap News Agency, South Korea’s memory export to Taiwan has surged by 225% in the first half of the year.

The primary driver of this increase is reportedly due to South Korean chipmaker SK hynix’s supply of HBM to U.S. AI chip giant NVIDIA, which packages its AI accelerators at Taiwan’s TSMC.

A researcher at the Korea Institutes for Industrial Economics & Trade, Kim Yang-paeng, also noted that the sharp increase in exports is likely related to SK hynix’s supplies for TSMC’s final packaging of AI accelerators.

The report from Economic Daily News further highlights the strong momentum in NVIDIA’s AI chip shipments, with TSMC, as the key manufacturing partner, receiving steady advanced process orders.

The report from Yonhap News Agency also cited data from the industry ministry and the Korea International Trade Association released on August 11th, showing that South Korea’s memory exports to Taiwan in the first half of the year grew by 225.7% year-on-year, reaching USD 4.26 billion.

This growth significantly outpaces the overall increase in South Korea’s memory exports, which was 88.7%. Additionally, Taiwan has become South Korea’s third-largest market for memory exports in the first half of the year, climbing two spots to surpass Vietnam and the United States.

Another Korean media outlet, The Korea Herald, noted that since the 2010s, South Korea’s annual memory exports to Taiwan have ranged between USD 1 billion and 4 billion. The latest data indicates that this year’s export volume may set a new record, potentially reaching USD 8 billion.

Read more

• [News] SK hynix CEO: Demand for Memory Chips to Remain Robust until 1H25, Driven by HBM
• [News] Samsung’s 8-layer HBM3e to Start Mass Production in Q3, Driving HBM Sales to Soar 3-5 Times in 2H24

(Photo credit: SK hynix)

As September draws closer and iPhone 16’s release date is nearing, suppliers have been ramping up their production of iPhone 16 OLED panels in preparation. According to the reports by ETNews and MacRumors, Samsung Display and LG Display started initial production of iPhone 16 OLED panels as early as in June, and have substantially boosted production over the past month.

ETnews notes that Apple is forecasting shipments of approximately 90 million iPhone 16 units this year, while the production of OLED panels is estimated to be around 30% higher, totaling about 120 million units.

Among them, Samsung is said to have the lion’s share by supplying around 80 million OLED panels by the end of this year, while LGD is projected to provide approximately 43 million panels, according to ETnews. Both companies are on track to meet these production targets.

The reports states that the iPhone 16, iPhone 16 Plus, iPhone 16 Pro, and iPhone 16 Pro Max will have a design similar to the iPhone 15 models, but Apple is increasing the sizes of the iPhone 16 Pro and iPhone 16 Pro Max.

The iPhone 16 Pro will feature a 6.3-inch display, up from 6.1 inches, while the iPhone 16 Pro Max will have a 6.9-inch display, an increase from 6.7 inches. The display sizes for the standard iPhone 16 models will remain unchanged, with the iPhone 16 maintaining a 6.1-inch display and the iPhone 16 Plus featuring a 6.7-inch display.

Earlier in May, both LG Display and Samsung Display secured orders for OLED panels for Apple’s iPhone 16 Pro, according to a previous report from The Elec. Subsequently, LG Display also has acquired orders for iPhone 16 Pro Max panels.

It seems that Apple tends to release more OLED orders to LGD and counts on it to be a solid second supplier. Another report by The Elec reveals that Apple is likely to use LGD as the second supplier for the OLED screens of next year’s iPhone SE 4. The iPhone SE series is Apple’s budget-friendly option, traditionally sourcing screens exclusively from the Chinese manufacturer BOE.

Read more

• [News] Apple May Choose LGD as Second Supplier for iPhone SE 4 OLED
• [News] Fuelled by AI Features, Apple’s iPhone 16 Shipments Reportedly to Increase by 10%

(Photo credit Apple)

Tesla, the electric vehicle giant, initially planned to establish a plant in Thailand, with an estimated investment exceeding USD 5 billion. However, according to a report from Thai media outlet The Nation, Tesla has decided to scrap the plans for the Thai plant after further evaluation, shifting its focus to expanding the local charging station network instead.

The report further cited sources, indicating that Tesla has re-evaluated its expansion plans in Asia and has decided to cancel all projects in the region. This includes not only the planned one in Thailand but also projects in Malaysia and Indonesia, leaving only the most economically viable production lines in China, the U.S., and Germany.

In September 2023, Thai Prime Minister Srettha Thavisin announced the successful attraction of Tesla to Thailand following a visit to the U.S. In November, Srettha met with Tesla executives and revealed that the company had begun site evaluation for a plant, with an investment exceeding USD 5 billion.

However, due to significant changes in the electric vehicle market impacting expected investment returns, Tesla has decided to postpone its global expansion plans.

Besides the aforementioned Asian locations, Tesla had also planned to build a plant in the Nuevo León industrial park in northeastern Mexico. However, Tesla reportedly confirmed in October 2023 that the plan is on hold due to economic concerns.

Thailand is reportedly the largest automotive producer in Southeast Asia. With the global trend shifting towards electric vehicles replacing traditional combustion engines, the Thai government is said to be promoting related policies to boost local EV production.

The goal, as per a report from Bloomberg, is expected to have electric vehicles make up 30% of the country’s total automotive production by 2030.

Read more

• [News] Impacted by the Tariff Increase by EU, Tesla Reportedly Expects Price Hike for European Model 3
• [News] TSMC Reportedly Commences Production of Tesla’s Next-Generation Dojo Chips, Anticipates 40x Increase in Computing Power in 3 Years

(Photo credit: Tesla)