Samsung chairman debunks foundry, chip biz spinoff rumors

But not hard to believe of business units with over $2 billion in operating losses in 2023

Despite reports of poor demand and mounting losses, Samsung says it has no plans to spin off its foundry business or chip design operation.

"We are hungry to grow the business; not interested in spinning [them] off," Samsung Electronics Chairman Jay Y. Lee told Reuters in an interview.

Lee's comments contradict a recent Samsung Securities report viewed by Business Korea, which had suggested spinning off the foundry unit — the second largest globally — and listing it in the US.

Samsung has invested heavily in building out its foundry capacity in response to pandemic-era semiconductor shortages. This has included the development of a new fab in Taylor, Texas, which has faced ballooning costs, which have reportedly pushed its expected cost from $17 to $25 billion. In April, Uncle Sam said it would provide up to $6.4 billion in support for the electronics giant's Texas operation expansions.

Unfortunately for Samsung, its investments have been overshadowed by reports of poor yields from its 3nm process tech, the first to use a gate-all-around transistor design. The production challenges are also said to have hampered the production of its own Exynos 2500 mobile SoC.

Poor yields have also been blamed for delays to the Taylor fab expansion, with mass production reportedly being pushed back from 2024 to sometime in 2026.

As a result, Samsung now faces mounting losses. According to analyst estimates reviewed by Reuters, Sammy's foundry and chip design businesses accounted for roughly $2.4 billion in operating losses in 2023. Unlike Intel, Samsung does not break out these business units in its quarterly reports.

In spite of this, Samsung's messaging around its foundry biz have remained generally positive with its most recent earnings report calling [PDF] for "revenue growth to outpace the market level thanks to the full-scale mass production of second-generation 3nm GAA technology."

Samsung also touted strong demand from AI and HPC customers, predicting a "fourfold increase in our customer base and a ninefold increase in sales by 2028 from the levels in 2023," 

The Register reached out to Samsung for comment; we'll let you know if we hear anything back.

Lee's insistence that it'll be keeping its chipmaking and design businesses in house comes just weeks after Intel CEO Pat Gelsinger, facing intense pressure from investors, announced the chipmaker would spin off its foundry unit as an independent subsidiary.

Intel's Foundry division has been bleeding cash, reporting $2.8 billion in operating losses during Q2 alone, which brings its total losses to $5.3 billion for the fiscal year so far.

However, as we've previously discussed, Intel's Foundry spinoff is largely symbolic, with Gelsinger remaining in charge of the subsidiary. ®