Lee Jae-yong: "No Interest in Spinning Off Foundry or System LSI Business"

Interview with Foreign Media in the Philippines
First Time to Announce Official Position

Samsung Electronics Chairman Lee Jae-yong stated on the 7th that he has "no interest" in spinning off the foundry (semiconductor contract manufacturing) and System LSI businesses, which are experiencing poor performance.

According to foreign media, during an interview with a foreign news outlet while visiting the Philippines, Chairman Lee said, "We are hungry for growth in the (foundry) business." As Samsung's foundry and System LSI businesses have continued to struggle, the need for spinning off these two businesses has been steadily raised, but this statement effectively dismisses such possibilities. It is reported that this is the first time Chairman Lee has officially expressed his position on the foundry business spin-off.

Samsung Electronics Chairman Lee Jae-yong is attending the Korea-Philippines Business Forum held at a hotel in Manila, Philippines, on the afternoon of the 7th (local time). [Image source=Yonhap News]

Earlier, in 2019, Chairman Lee presented the 'System Semiconductor Vision 2030,' setting a goal to invest 133 trillion won in the system semiconductor sector, including foundries, by 2030 to become the number one system semiconductor company by that year. In 2021, Samsung decided to add 38 trillion won to the existing plan, bringing the total investment to 171 trillion won. However, the gap between Samsung's foundry business and Taiwan's TSMC, the world's largest foundry company, is widening.

According to Taiwanese market research firm TrendForce, TSMC's market share in the second quarter of this year was 62.3%, widening the gap with Samsung (11.5%) to 50.8 percentage points. Samsung's foundry is estimated to have posted a loss exceeding 2 trillion won last year due to sluggish orders and is expected to incur losses of several trillion won this year as well. In response, Samsung Electronics has begun adjusting operating rates, including suspending operations of some foundry facilities.