Samsung Foundry Targets AI Growth Amid Profitability Delays

Samsung Electronics is pursuing a recovery for its foundry business through high-value AI and automotive contracts after enduring five consecutive quarters of losses. The company has secured a 22 trillion won order from Tesla for AI6 chips and is collaborating with Nvidia on Groq AI accelerator chips and the Drive AGX Thor autonomous driving platform. Growth is further supported by production for Apple image sensors and capacity constraints at TSMC, which are pushing clients like AMD toward supplier diversification.

Despite these wins and signs of recovery as early as the third quarter of 2026, leadership has cautioned against immediate optimism. President Han Jin-man announced on June 12 that the unit is unlikely to become profitable next year, suggesting 2028 as a more realistic target for a turnaround. Han cited structural weaknesses, including a heavy reliance on mobile clients and low-margin orders, as primary drivers of the deficit.

To restore competitiveness, Samsung is prioritizing high-value orders and improving yields at its facilities, including a $37 billion fabrication plant in Taylor, Texas. As part of this strategic shift, the company plans to gradually wind down its 8-inch foundry operations to move away from increasingly price-driven competition.