Lee Jae-yong Denies Foundry Spin-off Rumors, Says "We Are Eager to Grow" (Comprehensive)

Commitment to Continue Foundry Business
Ongoing Investment in Texas Plant and More

Samsung Electronics Chairman Lee Jae-yong recently drew a line against the industry rumors about spinning off the foundry (semiconductor contract manufacturing) business. This is the first time Chairman Lee has officially expressed his stance on whether to spin off Samsung Electronics' foundry business.

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]

On the 7th (local time), while visiting the Philippines as part of an economic delegation, Chairman Lee told foreign reporters, "We are not interested in spinning off the foundry and system LSI (semiconductor design) businesses," adding, "We are eager to grow the business."

This is interpreted as a demonstration of his determination to continue expanding the foundry business according to the existing policy, despite recent poor performance and outlook.

Chairman Lee has been fueling the foundry business with massive investments. In 2019, he announced the ‘System Semiconductor Vision 2030,’ setting a goal to invest 133 trillion won in the system semiconductor sector, including foundry, by 2030 to become the number one system semiconductor company by that year. In 2021, he added 38 trillion won to the existing plan, deciding to invest a total of 171 trillion won.

However, this year the foundry business is showing results below expectations. A deficit of several trillion won is expected again this year following last year, and some securities firms and industry insiders have suggested a spin-off.

Samsung Electronics' foundry business is struggling due to sluggish orders. As of the second quarter, its market share was 11.5%, with a gap of more than 50 percentage points compared to Taiwan's TSMC (62.3%). As a result, Samsung is falling behind in competition with TSMC, and major global companies such as Nvidia and Apple are strengthening their cooperation with TSMC, causing setbacks in Samsung Electronics' customer acquisition.

Chairman Lee also mentioned the situation of the semiconductor factory under construction in Taylor, Texas, USA, saying, "It has become a bit difficult due to changes." Samsung Electronics has postponed the start of operations at the Taylor plant to 2026 and maintains its position to continue steady investment for business expansion.