Samsung Securities suggests Foundry division should spin off

Samsung Foundry appears to be in trouble, as low 3nm yield issues and loss of clients continue. Samsung should announce its Q3 financial report in mid-October, and analysts estimate that the Foundry and System LSI divisions will post significant operating losses.

Industry watchers (via Business Korea) say that Samsung's non-memory business, i.e., Foundry and System LSI, will reveal operating losses of around 500 billion won, or roughly $385 million.

The tech giant's Foundry division has been struggling to keep up with rival TSMC, and poor 3nm yields aren't helping the matter. Reportedly, Samsung Foundry couldn't secure clients like NVIDIA and Apple, both of which picked TSMC for their silicon manufacturing needs.

Samsung can't narrow the gap with TSMC and might spin-off Foundry

Market analysts at TrendForce say that Samsung Foundry had a market share of 11.5% in Q2 2024, while TSMC held 62.3% of the market, widening the gap to a significant 50.8%.

With the loss of key clients, low yield issues at the Texas plant, and an uncertain future for the Exynos 2500 chip, Samsung Securities calls for a strategic change.

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According to new reports, Samsung Securities, i.e., the financial services arm, recently stated that the “Foundry business requires closer contact with clients, active localization like establishing additional plants in the US is necessary.”

A Samsung Securities representative went as far as to say that the tech conglomerate should spin off Foundry into a new division and list it on the US stock market. If this comes to pass, Samsung Foundry will be transformed and reborn into a new company.

As far as Exynos is concerned, there is a chance that Samsung's mobile division might be forced to use Snapdragon chips exclusively for the upcoming Galaxy S25 series due to ongoing poor Exynos 2500 yield rates. The Galaxy S25 lineup should be unveiled in early 2025.

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Mihai Matei - Senior Editor

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First Samsung device: SGH-A800

Mihai is a blogger and column writer at SamMobile. His first Samsung phone was an A800 which took a lot of beating, and a part of him still misses the novelty of the clamshell design. In his free time, he enjoys watching shows, documentaries, and stand-up comedy; listening to music, taking walks, and occasionally playing old(er) video games.

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