Samsung Electronics Co. is shuttering up to half of its advanced chip manufacturing lines by year-end as losses in its foundry business reach 1 trillion won ($740 million), according to people familiar with the matter.
The world’s largest memory chipmaker has already powered down 30% of its 4-nanometer, 5-nanometer, and 7-nanometer production capacity at its Pyeongtaek facilities, the people said, asking not to be identified discussing private information. The shutdown affects Lines 2 and 3, which produce chips for external customers.
The move marks a shift from Samsung’s public stance of maintaining operations at lower utilization rates. The company is struggling to win orders from major clients including Nvidia Corp., Advanced Micro Devices Inc., and Qualcomm Inc., while Chinese customers delay projects amid U.S. trade restrictions.
The production cuts could widen Samsung’s competitive gap with Taiwan Semiconductor Manufacturing Co., which dominates the contract chip manufacturing market. A Sangmyung University professor warned the company’s focus on its core memory business has left its foundry division vulnerable.
Samsung’s foundry unit posted estimated losses of 1 trillion won in the third quarter, prompting the cost-reduction strategy. The company declined to comment on the specific production adjustments.
