Samsung Electronics' Foundry Division Expected to Turn Profitable in Q3

Samsung Electronics' foundry business is reportedly expected to turn profitable as early as the third quarter of this year, significantly earlier than its original target of the end of this year or next year. This positive development is mainly attributed to improved yield rates for its advanced 2nm process and steady growth in HBM chip production.

According to reports, as of the first quarter of this year, Samsung's 2nm GAA process yield had exceeded 60%. Although it has not yet reached the 70% threshold considered economically viable for mass production, industry insiders believe this level is sufficient to meet initial mass production needs and attract new customers.

Customer acquisition efforts are gradually translating into revenue. Multiple partnerships established since last year are expected to generate substantial income in the second half of the year. In July of last year, Samsung signed a long-term supply contract with Tesla worth 22.8 trillion Korean won for autonomous driving chips. The company also plans to mass-produce 2nm AI5 and AI6 chips at its Taylor, Texas factory in the second half of this year. Additionally, NVIDIA CEO Jensen Huang publicly confirmed at GTC 2026 in March last year that Samsung is a foundry partner for its "Groq 3" AI inference chips.

Order volumes are growing rapidly and steadily expanding. Samsung predicts that its 2nm-related orders will increase by more than 130% year-over-year, with partners including Tesla, NVIDIA, Apple, and Nintendo. Reports indicate that HBM4 chip supply is already sold out. Furthermore, as TSMC's advanced process capacity approaches saturation, some fabless companies are beginning to consider Samsung as an alternative. AMD is also considering a dual-foundry strategy for some of its next-generation GPUs, providing strong support for Samsung's foundry business recovery.

The commencement of production at the new Taylor factory is expected to improve the profit-and-loss structure. With the Taylor factory set to enter mass production, the depreciation pressure from its $37 billion investment is likely to ease.