*Source: https://it.chosun.com/news/articleView.html?idxno=2023092150390
● Samsung Foundry Sees Massive Turnaround, 1 Trillion Won Loss Slashed, 2nm Chip Production Begins
Samsung Foundry Reversal: More than 1 Trillion Won Deficit Reduction and Start of 2nm Exynos Mass Production – Will the Gap with TSMC Close?
This article summarizes the rebound background and outlook of Samsung Electronics’ foundry performance in a news format.
The key points are: 1) Deficit reduction of more than 1 trillion won in the third quarter, 2) Expanding orders from big tech companies like Tesla, Apple, and Nvidia, 3) Mass production start of 2nm-based Exynos 2600 with potential Galaxy S26 integration, 4) Yield improvement (estimated from about 30% to 50%), 5) Texas Taylor Fab operation (aimed for 2026).
We have categorized and detailed the foundry/semiconductor market, AI computation demand and performance impact, risks, and even provided a section on the ‘most important insights’ often overlooked by other media.
Key Summary (News Headline)
Samsung Electronics reduced its foundry deficit by more than 1 trillion won in the third quarter by increasing the proportion of advanced processes.
It announced an expansion of collaboration with Apple and Nvidia, including a 22.8 trillion won contract with Tesla for fully autonomous driving chips (AI6).
The first product indicating the commercialization of Samsung Foundry’s 2nm process, Exynos 2600, started mass production in November, with a high possibility of being mounted on the Galaxy S26.
Industry estimates suggest that the 2nm yield has improved from about 30% earlier in the year to around 50% recently.
Detailed Analysis — Big Tech Orders and Supply Pipeline
Tesla: Signed a 22.8 trillion won AI chip contract with Samsung Electronics.
The chip (AI6) will be mass-produced from the second half of 2026 at the Taylor Factory in Texas, USA.
Apple: Expanding supply relationships through partial participation in the A15 process and joint development of next-generation image sensors.
Nvidia: Joined as a partner in the ‘NVLink Fusion’ ecosystem, pursuing cooperation in GPU-based AI processes.
Qualcomm: Currently supplying 2nm products at a sample level, with potential for supply recovery being suggested.
Product/Process Status — Exynos 2600 and 2nm Transition
Exynos 2600 began mass production in November with Samsung Foundry’s 2nm first-generation process.
Internal testing reports Exynos 2600 NPU performance being over six times that of Apple’s next-generation AP ‘A19 Pro’.
This indicates competitiveness in generative AI (on-device inference, etc.).
Although there is a high probability of its integration into the Galaxy S26, Samsung has stated that it is still in the evaluation and confirmation stage internally.
Financial/Market Impact Analysis
3rd Quarter Deficit Reduction: Increase in advanced process ratio and large customer orders resulted in a report of more than 1 trillion won deficit reduction compared to the previous quarter.
Cost/Profitability Improvement Factors: Increase in high-value products due to 2nm commercialization, yield improvement, operation rate enhancement, and dispersion effect of fixed costs during facility operation.
Mid- to Long-term Revenue Line: With the Tesla AI6 contract (a large single order) and the operation of the US fab, there is a high possibility of full-scale foundry sales and margin expansion beginning in 2026.
Strategic/Geopolitical Significance
The US Taylor Fab is an important card for attracting global customers considering political and security risks.
Production bases in the US align with US policies such as the CHIPS Act, making it advantageous for attracting customers.
Competition with TSMC: Samsung’s advanced process lineup (2nm commercialization) and large customer orders are assessed as challenges to TSMC’s monopoly structure.
Risks and Remaining Challenges
Sustainability of Yield: The improvement from 30% to 50% is positive, but further improvement and stabilization are necessary.
Customer Transition Costs and Trust Issues: To completely convert existing TSMC-dependent customers, long-term quality and delivery proof are necessary.
Capacity Issues: Since advanced processes have limited initial capacity, absorbing all orders is crucial.
Price Competition and Margins: TSMC’s responses (price and capacity) and fluctuations in global demand directly impact profitability.
Foundry Impact from the AI Trend Perspective
Expansion of On-Device AI Demand: The high NPU performance of Exynos 2600 stimulates generative and inference AI demand in edge devices like smartphones.
Data Center vs. Edge Demand Change: The spread of high-performance mobile NPU may shift some AI workloads from cloud to edge.
GPU/HPC Demand and Foundry: Cooperation with Nvidia increases foundry demand for data center GPUs and HPC chips, diversifying the foundry portfolio.
Critical Insights Often Overlooked by Other Media (Must-read)
1) The division of demand between ‘Edge AI’ and ‘Data Center AI’ changes the foundry competition landscape.
Improved NPU performance at the level of Exynos 2600 can significantly increase AI computation in edge devices like smartphones and cars.
In this case, the demand structure for semiconductors may be reshaped as some of the data center GPU demand shifts.
2) The strategic value of the Texas fab is ‘customer risk mitigation’ beyond mere production capacity.
Considering geopolitical risks and subsidies (e.g., CHIPS Act), US and European customers are likely to prefer US production.
Therefore, the Taylor Fab is a weapon for Samsung to secure customers not only with its technological competitiveness but also with its ‘geographic and policy advantages.’
3) Yield improvement signals a ‘recovery of technical strength,’ but TSMC’s response speed and customer loyalty will determine the final outcome.
If Samsung steadily improves yield, it can gain advantageous positions in price and supply strategies.
Practical Implications for Investors and Companies
Investors: The short-term performance improvement (deficit reduction) is a positive signal, but the sustainability of margin improvement should be watched.
Customers (Systems/OEMs): Diversifying supply sources, including Samsung, is significant from a risk management perspective.
Partners (Equipment/Material Companies): The expansion of 2nm mass production amplifies demand for advanced equipment and materials, increasing opportunities in the global supply chain.
Conclusion — Outlook and Checkpoints
In the short term, Samsung Electronics’ foundry performance is likely to improve with the expansion of customer orders and the increase in the proportion of advanced processes.
In the mid- to long-term, the operation of the Texas fab (2026), continuous yield improvement, and maintaining partnerships with major big tech companies will be key.
The gap in technology and market share with TSMC could rapidly close, but a complete ‘regaining of supremacy’ depends on restoring customer trust and expanding large-scale capacity.
Investment/Industry Checklist (Points to Check Quickly)
1) Quarterly announcements and industry reports on Samsung Electronics’ 2nm yield trend.
2) Confirmation of Exynos 2600 integration into the Galaxy S26 and mass production volume.
3) Construction and operation schedule of Taylor Fab and receipt of subsidies within the US.
4) Announcements of foundry diversification strategies by major customers such as Nvidia, Qualcomm, and Apple.
5) TSMC’s price and capacity response and new process plans.
Closing Notes
Samsung Electronics’ foundry division is showing signs of recovery through technological advancements and securing large customers.
However, to gauge ‘sustainability,’ one must watch for yield stability, large-scale mass production capacity, and restoring trust at the customer level.
As we enter the AI era, the importance of ‘semiconductors’ and ‘foundries’ is growing.
< Summary >
Samsung Electronics showed a rebound signal by reducing its foundry deficit by more than 1 trillion won in the third quarter.
The order pipeline is being strengthened through cooperation with Tesla (22.8 trillion won AI chip contract), Apple, and Nvidia.
The 2nm Exynos 2600, which started mass production in November, shows superiority in NPU performance and is highly likely to be mounted on the Galaxy S26.
The yield has reportedly improved from about 30% at the beginning of the year to around 50% recently, and the Texas fab is scheduled to operate in 2026.
The key risks are yield sustainability, capacity shortage, and restoring customer trust, and changes in AI demand structure can greatly impact foundry competition structure.
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