Han Jin-man, president of Samsung Electronics' (005930.KS) foundry, or contract chipmaking, division, said the unit could swing to an operating profit starting in 2028. The company plans to focus on improving earnings through business restructuring, along with consecutive orders from big tech firms including Tesla, Nvidia and now Google.
At a management briefing for the foundry division on Wednesday, Han told employees, "A turnaround to profit for the foundry business does not look easy next year either," adding, "There is a high possibility of achieving profitability in 2028." He said, "Creating the losses is ultimately management's responsibility," and pledged to do his best to improve earnings.
Regarding the continuing losses, Han said, "As head of the foundry division, I feel a heavy sense of responsibility," and added, "Since we have sufficient technological capabilities and competitiveness, we can certainly recover our competitiveness." He urged employees to "trust one another and join forces together."
Samsung Electronics' non-memory division, which combines foundry and System LSI, is expected to post an operating loss of 2 trillion to 3 trillion won this year, following losses last year. Han cited the recently finalized special management incentive system as one reason the division will inevitably continue to record losses next year. Through a recent wage negotiation, Samsung Electronics agreed with its labor union to pay employees in the semiconductor (DS) division a special management incentive equal to 10.5% of business performance when target earnings are met. Based on this year's operating profit forecast, the special management incentive is estimated at 30 trillion to 40 trillion won.
Including this, Han cited delays in moving away from a mobile-centered business structure, insufficient technological maturity, low profitability and inadequate mature-process operation strategy as causes of the weak earnings, and pledged improvements. In particular, regarding the low-profit 8-inch foundry business, he reportedly said "the market is becoming a red ocean" and explained a plan for a phased wind-down.
Samsung Electronics' foundry division is focusing on improving earnings, having won orders to produce Tesla's AI6 chip and Nvidia's Grok language processing unit (LPU). Recently, the possibility has also been raised that it could take on production of components for Google's next-generation Tensor Processing Unit (TPU).
