Samsung not keen on spinning off foundry business – report

Samsung Electronics (OTCPK:SSNLF) is not interested on spinning off its contract chip manufacturing business and its logic chip designing business, Reuters reported, citing the company’s Chairperson Jay Y. Lee.

On being asked if the South Korean tech giant was thinking of spinning off the chip manufacturing business known as Foundry and its System LSI logic chip designing business, Lee said “we are hungry to grow the business. Not interested in spinning [them] off,” according to the report.

In addition, Lee noted that Samsung’s project to build a new chip facility in Taylor, Texas has been “a little bit tough, because of a changing situation (and the U.S. presidential) election,” the report added.

Lee’s remarks came during a visit to the Philippines where he accompanied South Korea’s President Yoon Suk Yeol to a summit with the Philippines’ President Ferdinand Marcos Jr, the report noted.

In April, Samsung noted that it had postponed the production schedule of the Taylor plant to 2026 from its initial plan of late 2024, and said operations would be managed in a phased manner depending on customer demand.

The two businesses of Samsung have been seeing billions of dollars in annual losses due to weak demand and have been dragging down the overall performance of Samsung, the report noted, citing analysts.

Last year, Samsung incurred an operating loss of 3.18T won ($2.4B) from the Foundry and System LSI businesses, as per average estimates of nine analysts reviewed by the news agency. The company does not provide a performance breakdown of the two businesses.

During its second quarter results in July, Samsung said that the System LSI Business posted record-high sales for the first half of 2024 as it saw earnings improve in the second quarter due to increased supply of key components. Meanwhile, the Foundry Business saw improved earnings due to increased demand across applications.

Samsung is still far behind industry leader Taiwan Semiconductor (TSM) but it may not be losing out completely, according to SA analysts.