Samsung Electronics is not interested in spinning off its contract chip manufacturing business as well as its logic chip design business, its chairman Jay Y. Lee told Reuters on Monday.
Analysts say the two companies are posting annual losses in the billions of dollars due to weak demand and have weighed down the overall results of the South Korean company, which is the world’s largest maker of memory chips.
Samsung is expanding into logic chip design and contract chip manufacturing to reduce its reliance on simple memory chips. Logical chips are used for data processing.
In 2019, Lee announced his vision to overtake Taiwan’s TSMC as the world’s largest contract chip maker by 2030.
The company has since announced billions of dollars in investments in contract chip manufacturing, building new factories in South Korea and the United States.
However, several sources familiar with the matter told Reuters that Samsung has struggled to secure large orders from customers to fill the new capacity.
Asked if Samsung was considering spinning off a chip manufacturing company called a foundry or its system LSI logic chip design company, Lee told Reuters: “We want to grow the business. We are not interested in separating (them).”
Lee also said that Samsung’s project to build a new chip factory in Taylor, Texas, was “a bit difficult, due to the changing situation (and the US presidential election).”
He did not clarify. Samsung Electronics did not comment further.
Lee was speaking during a visit to the Philippines where he accompanied South Korean President Yoon Suk Yeol to a summit with President Ferdinand Marcos Jr.
In April, Samsung said it had pushed back the Taylor plant’s production schedule to 2026 from its earlier plan of late 2024 and said operations would be managed in phases depending on customer demand.
The move underscores the challenges it faces in its efforts to overtake larger rival TSMC, which counts Apple and Nvidia as its main customers.
Last year, Samsung posted an operating loss of KRW 3.18 trillion ($2.4 billion, or roughly 19,830 million rupiah) from its foundry and LSI systems businesses, according to an average estimate of nine analysts polled by Reuters.
Samsung does not provide a breakdown of the performance of the two businesses.
Analysts estimate that these two operations would report another loss of KRW 2.08 trillion (roughly Rp. 12,971 crore).
© Thomson Reuters 2024
(This story was not edited by NDTV staff and was automatically generated from a syndicated feed.)
