Samsung Electronics Co. plans to cut its foundry investment to 5 trillion won ($3.8 billion) in 2025, marking a dramatic pullback from about 10 trillion won spent this year as customer demand weakens and production challenges mount.
The world’s second-largest contract chipmaker is grappling with manufacturing delays and low yield rates in its advanced processes, causing it to lose ground to Taiwan Semiconductor Manufacturing Co. While TSMC poured NT$956 billion ($30.5 billion) into facilities last year, Samsung’s investment was just a quarter of that amount.
The Korean tech giant will redirect its spending to upgrade existing facilities rather than expand capacity. At its S3 plant in Hwaseong, the company will convert part of its 3-nanometer production line to make 2-nanometer chips. It also plans to set up a small test line for 1.4-nanometer chips at its P2 facility in Pyeongtaek.
The company’s foundry utilization rates have dropped more than 30% for 4- to 7-nanometer processes at its Pyeongtaek facilities, indicating continued weakness in demand from major technology customers. Samsung’s focus now shifts to improving its 2-nanometer technology to regain competitive edge in the market.
