Securities and Industry Propose "Considering Foundry Spin-off"
Samsung Electronics Remains Unresponsive Without Official Statement
Attention on Whether Position Will Be Announced at Munich Forum Next Month
Expected to 'Push Forward' According to Existing Roadmap
Samsung Electronics is reported to have drawn a line against the spin-off of its foundry (semiconductor contract manufacturing) division, which has been raised by some in the securities industry and within the sector. Attention was focused on Samsung Electronics' moves after U.S. company Intel announced plans to spin off its foundry business unit, but Samsung is said to have chosen a ‘direct breakthrough’ approach by betting on aggressive investment and technology development according to its roadmap.
According to the semiconductor industry on the 26th, Samsung Electronics has not issued any official statements or responded at all regarding the recently raised possibility and prospects of a foundry spin-off. Related departments are reportedly continuing foundry-related businesses without any disruption.
The possibility of Samsung Electronics spinning off its foundry division gained attention in July when Samsung Securities published a report titled ‘Geopolitical Paradigm Changes and Industry.’ In the report, Samsung Securities stated, "Since foundry requires closer contact with customers, active localization is necessary, such as Samsung Electronics’ recent establishment of additional factories in the U.S.," and recommended a foundry spin-off as well. They asked, "How about Samsung Electronics spinning off its foundry and listing it in the U.S.?" This recommendation, coming from a Samsung Group affiliate, attracted significant industry interest, and combined with Intel’s decision to spin off its foundry business unit, it fueled speculation about a spin-off.
There was even speculation that Choi Si-young, President of Samsung Electronics’ Foundry Business Division, and other responsible executives would clarify their stance on the foundry spin-off rumors at the Foundry Forum to be held in Munich, Germany, in mid-next month.
However, at present, Samsung Electronics appears more likely to re-emphasize its foundry strategy and focus on attracting customers. In its ‘semi-annual report’ released this year, it stated, "We plan to mass-produce and ship the second generation of the 3-nanometer (nm, one-billionth of a meter) process applying ‘Gate-All-Around (GAA)’ technology for mobile devices in the second half of this year according to plan." It also said that the 2-nanometer process will be "pursued in a timely manner while focusing on expanding the customer base." Samsung Electronics has set a yield improvement target of over 60%. Currently, TSMC’s 3-nanometer process yield is between 60% and 70%, and Samsung aims to raise its yield to the same level.
Various research institutions and semiconductor-related organizations are also showing interest in the possibility and related trends of Samsung Electronics’ foundry spin-off. However, many research institution officials said, "It is a matter of the company’s strategic choice, so it is difficult to predict any possibilities or effects at this time."
Analysis suggests that the intensity of Samsung Electronics’ foundry spin-off scenario could vary depending on its actions and performance from the second half of this year through early next year. In the foundry market share report for Q2 recently released by global market research firm TrendForce, Samsung Electronics held 11.5%, widening the gap with the No. 1 TSMC (62.3%) to 50.8 percentage points, creating a perception that catching up has become practically difficult. As a result, there is a view that the time is approaching for Samsung Electronics to make a ‘selection and concentration’ decision to spin off the foundry and focus on product development. The industry also sees this as compounded by existing concerns that there will not be many companies willing to entrust the latest semiconductor products to potential competitors for contract manufacturing.
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