Samsung Electronics Secures 22.8 Trillion KRW Semiconductor Foundry Contract (Comprehensive)

Client Estimated to be a Global Big Tech Company... Production Expected at US Taylor Plant

Samsung Electronics has signaled a breakthrough for its struggling foundry business, which has incurred losses of trillions of won quarterly, by securing a semiconductor contract worth approximately 23 trillion won.

Samsung Electronics Seocho building [Yonhap News photo]

Samsung Electronics announced on the 28th that it has signed a semiconductor manufacturing (foundry) supply contract with a global major corporation, valued at 22.7648 trillion won.

This supply contract represents 7.6% of Samsung Electronics' total revenue of 300.8709 trillion won last year and is the largest contract for the Samsung Electronics semiconductor division based on a single client.

The contract period is a long-term agreement of over 8 years, starting from this month's 24th to December 31, 2033.

While the identity of the contracting party and specific details are undisclosed due to business confidentiality, the industry speculates it to be a major US tech company.

Attention is focused on whether Samsung's foundry business can overcome its recent slump and pioneer a new path with this large-scale order.

In Samsung Electronics' recently announced preliminary second-quarter earnings, operating profit reached 4.6 trillion won. The market estimates that the DS (Device Solutions) division, responsible for the semiconductor business, generated less than 1 trillion won in operating profit.

The foundry's losses are cited as a primary reason for this sluggish performance.

With this order, Samsung Foundry is expected to produce the client's artificial intelligence (AI) semiconductors, with production anticipated at its Taylor, Texas plant, scheduled to commence operations next year.

An industry official commented, "It is speculated that large-scale orders have been secured as Samsung Foundry's advanced process yields have improved to a certain extent," adding, "The operation of the US Taylor plant, which will produce advanced semiconductors, has also received a green light." Yonhap News