![[Exclusive] Samsung Electronics' Foundry Facility Investment Cut in Half This Year... If This Continues, Global No. 2 in Danger [Exclusive] Samsung Electronics' Foundry Facility Investment Cut in Half This Year... If This Continues, Global No. 2 in Danger](https://newsimg.sedaily.com/2025/01/21/2GNS3ANWBA_1.jpg)
Samsung Electronics semiconductor line overview. Photo courtesy of Samsung Electronics.
Samsung Electronics' foundry (semiconductor consignment manufacturing) division has set a plan to reduce its facility investment this year by more than half compared to the previous year. It is interpreted that the company is faced with a situation where it cannot actively increase production capacity due to sluggish orders from customers.
According to industry sources on the 21st, Samsung Foundry has set its budget for facility investment this year at around 5 trillion won. This is half the 10 trillion won invested in foundry facilities last year.
This year’s budget is even smaller compared to the period between 2021 and 2023 when Samsung Foundry made aggressive investments. When new investments centered around the Pyeongtaek plant were active, 15 to 20 trillion won was spent annually on the foundry alone.
This year, foundry investment will be made at S3 in the Hwaseong plant and P2 in Pyeongtaek. At S3, which is Samsung Foundry’s “mother fab,” work is underway to convert some of the 3㎚ (nanometer, 1 billionth of a meter) lines to 2㎚. The 2㎚ line conversion is difficult to view as a large-scale new investment, as it involves adding some equipment to the existing line.
P2 is scheduled to install a 1.4nm test line with a monthly production of 2,000 to 3,000 sheets within this year. In addition, there will likely be small-scale investments in equipment supplementation and the infrastructure of the Taylor plant in the United States.
Samsung Electronics already announced conservative facility investment during its 2024 third quarter earnings announcement in October last year, saying, “The scale of facility investment execution in 2024 is expected to decrease,” and “In 2025, we will maximize the operation of the production infrastructure we already have,” foreshadowing conservative facility investment.
The biggest reason Samsung Foundry is reducing its facility investment is the sluggishness of orders from customers. Samsung Foundry has recently been unable to attract 'big tech' customers due to problems with yield sluggishness and delays in advanced processes. It is known that the 4-7nm foundry facility currently located in Pyeongtaek has lowered its operating rate by more than 30%.
The bigger problem is that the gap with TSMC, the number one foundry company, is widening. Last year, TSMC poured 956 billion Taiwan dollars (about 42 trillion won) into foundry facility investment alone. It is analyzed that it spent four times more money than Samsung's foundry facility investment during the same period.
“Samsung Foundry appears to have prioritized increasing its 2nm technology competitiveness instead of drastically reducing its investment,” an industry insider explained.

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