2nm Facility

Samsung’s foundry business is facing a longer road back to profitability than many had hoped. The company now sees 2028 as a more realistic target for profit, signaling that the recovery is moving slower than expected. That outlook matters because foundry has become one of the most strategic battlegrounds in semiconductors. As competition intensifies, Samsung is being forced to set expectations more cautiously while it works to rebuild the business. Why the recovery is taking longer Han Jin-man, President and Head of the Foundry Business, told employees in a management briefing that turning the division profitable even next year would not be easy, according to Business Korea. His comments point to a more conservative internal stance than earlier hopes for a faster break-even point. The non-memory side of Samsung, which includes foundry and System LSI, is still expected by industry estimates to post losses of around 2 trillion to 3 trillion won this year. Although those losses are expected to narrow, the financial burden remains significant. Cost pressure is part of the problem. A new performance bonus system tied to semiconductor division results is also expected to weigh on margins, even if it helps Samsung retain talent in a highly competitive sector. Structural issues remain unresolved Samsung’s foundry business is still heavily dependent on demand linked to mobile devices, which leaves its customer base too narrow. At the same time, production maturity issues continue to hold back progress. Low-margin orders are adding to the strain, while the company’s approach to mature nodes has done little so far to improve operating efficiency. Taken together, these issues mean higher output alone will not be enough to restore profitability. The company needs better order quality, a healthier cost structure, and stronger technological competitiveness at the same time. In foundry, profit depends not only on manufacturing capacity, but also on yield, customer mix, and the value of the contracts secured. Samsung is shifting its strategy To respond to those challenges, Samsung is putting more emphasis on advanced nodes while also trying to build a steadier base for mature-node operations. The move reflects a broader reset aimed at reducing the weak points that have been hurting margins. The company may also gradually scale back its 8-inch segment, which has long been viewed as profitable. Stronger competition in that area could change its appeal in the years ahead. If that plan is carried out, Samsung will lean more heavily on lines it considers more strategic. But any such shift will need careful execution to avoid creating new pressure on revenue. 2nm plans and major clients could help later Even with the difficult outlook, Samsung still has some support factors in place. The company is said to be making progress in landing higher-quality clients, which would be important for both margins and technical credibility. Its 2nm facility in Taylor, Texas, is also part of the longer-term push. The plant is expected to begin initial operations at the end of this year, with mass production planned for next year. That new capacity could strengthen Samsung’s position at the most advanced node level. If execution stays on track, it may help attract higher-value projects and improve the company’s standing in global foundry competition. Partnerships with large players such as Tesla and others could also support the outlook over time. For Samsung, major customers bring not only volume, but also a stronger signal of credibility in the global foundry market. Still, Han Jin-man’s remarks make clear that the benefits will not show up quickly in earnings. Samsung now appears to be treating 2028 as the most realistic point at which the foundry business could return to profit. Source: sammyguru.com

Samsung Foundry Pushes Profit Timeline to 2028 as Pressure Mounts