Samsung Foundry Secures Large Order Worth 22.7 Trillion Won... Signals Revival (Comprehensive)

[Financial News] Samsung Electronics has signed a large-scale foundry (semiconductor contract manufacturing) supply contract with a global major corporation. There is anticipation that Samsung Electronics, which has been recording trillion-won deficits in the foundry business, will seek a performance rebound based on this order. 
Samsung Electronics announced on the 28th that it has signed a semiconductor contract manufacturing supply contract worth approximately 22.7647 trillion won. This is equivalent to 7.6% of Samsung Electronics' sales last year (300.8709 trillion won). The contract period is until December 31, 2033.
Samsung Electronics stated that it "reserves disclosure due to business confidentiality" regarding information on the contract partner. The industry sees it as a successful contract for ultra-fine processes below 3 nanometers (nanometer; 1㎚=1 billionth of a meter) with global big tech or automobile companies, which have been mentioned as major clients. 
Foundry has been cited as a major cause of deficits in Samsung Electronics' semiconductor (DS) division. It has struggled to secure key clients due to issues like yield (ratio of good products), and the deficit streak continues. The securities industry believes that Samsung Electronics recorded a deficit of about 2 trillion won in the system semiconductor, including the foundry and system LSI divisions, in the second quarter of this year. 
In the market share battle, foundry is said to be struggling even to "maintain second place" rather than competing for first place. According to market research firm TrendForce, Samsung Foundry's market share in the first quarter of this year was 7.7%, nearly 60 percentage points behind industry leader Taiwan's TSMC (67.6%). The gap with third-place China's SMIC (6%) is rapidly narrowing. Internally, there is widespread concern that they will be chased by Chinese companies, let alone TSMC, which is in first place. 
The industry sees that Samsung Electronics' foundry business will rebound through this contract. Although it recently succeeded in securing major clients like Nintendo, this was an order in legacy processes such as 8 nanometers, which is not expected to significantly improve profitability. However, as this 22 trillion won contract is expected to be an order in the ultra-fine process that Samsung Foundry has been striving for, it is evaluated that a performance green light has been turned on. Since it is a contract with a super-large client, it is also speculated that they have achieved a certain level of target yield. 
Samsung Electronics plans to take a decisive step in the ultra-fine 2-nanometer process from the second half of this year. TSMC, the number one foundry company, reportedly secured a 60% yield in the 2-nanometer trial production conducted at the end of last year, and there are voices saying they need to speed up. Han Jin-man, head of Samsung Electronics' foundry division, in his first message to employees after taking office, said, "Although we achieved the gate-all-around (GAA) process transition earlier than anyone else, there is still much lacking in commercialization," and ordered the rapid ramp-up (increase in production capacity) of the 2-nanometer process as the first task. 

soup@fnnews.com Lim Soo-bin Reporter