Samsung’s contract chip manufacturing business expected to post 10% sales growth
According to a new report out of South Korea, Samsung’s foundry business is likely to see sales growth of more than 10 percent this year even though its major client Apple has halted orders. The Korea Economic Daily reported today that sales could cross $4 billion this year, and if that really is the case, it would account for 40 percent of the total revenue of System LSI, Samsung’s non-memory chip business division.
Samsung’s contract chip manufacturing business has been buoyed by upbeat sales and recent reports suggest that Samsung might actually be considering spinning off the foundry business to ensure that it’s in a better position for future growth.
The business division largely relied on Apple as it started supplying application processing chips for the iPhone since 2007. Apple recently started placing orders with Taiwan Semiconductor Manufacturing Company and thus Samsung’s business suffered slowing sales. Apple only sourced processors from TSMC for the iPhone 7 and this forced Samsung to diversify its clientele which now includes the likes of AMD, NVIDIA and Qualcomm. Samsung has reportedly signed a deal with Tesla to manufacture chips for its self-driving cars as well.