Samsung Electronics just isn’t fascinated about spinning off its contract chip manufacturing enterprise in addition to its logic chip designing operation, its chairperson Jay Y. Lee instructed Reuters on Monday.
Analysts say the 2 companies are incurring billions of {dollars} of annual losses because of weak demand and have been dragging down the general efficiency of the South Korean firm, which is the world’s largest reminiscence chipmaker.
Samsung has been increasing into logic chip designing and contract chip manufacturing to decrease its reliance on bread-and-butter reminiscence chips. Logic chips are used to course of information.
Lee introduced his imaginative and prescient in 2019 to overhaul Taiwan’s TSMC because the world’s largest contract chipmaker by 2030.
The corporate has since introduced billions of {dollars} of investments in contract chip manufacturing, constructing new crops in South Korea and the US.
Nonetheless, a number of sources aware of the matter have instructed Reuters that Samsung has struggled to win massive orders from prospects to refill the brand new capability.
Requested if Samsung was contemplating carving out the chip manufacturing enterprise known as foundry or its System LSI logic chip designing enterprise, Lee instructed Reuters: “We’re hungry to develop the enterprise. Not fascinated about spinning (them) off.”
Lee additionally mentioned Samsung’s venture to construct a brand new chip manufacturing facility in Taylor, Texas has been “a little bit bit powerful, due to a altering scenario (and the US presidential) election.”
He didn’t elaborate. Samsung Electronics didn’t remark additional.
Lee was talking throughout a go to to the Philippines the place he accompanied South Korean President Yoon Suk Yeol to a summit with President Ferdinand Marcos Jr.
In April, Samsung mentioned it had pushed again the manufacturing schedule of the Taylor plant to 2026 from its earlier plan of late 2024, and mentioned operations can be managed in a phased method relying on buyer demand.
The transfer underscores challenges it faces in its efforts to overhaul larger rival TSMC, which counts Apple and Nvidia as main prospects.
Final yr, Samsung posted an working lack of KRW 3.18 trillion ($2.4 billion or roughly Rs. 19,830 crore) from the foundry and System LSI companies, in accordance with common estimates of 9 analysts reviewed by Reuters.
Samsung doesn’t present a efficiency breakdown of the 2 companies.
Analysts estimate that the 2 operations would report one other lack of KRW 2.08 trillion (roughly Rs. 12,971 crore) this yr.
© Thomson Reuters 2024
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