Samsung Foundry’s road to profitability may take longer than expected, even as the company sees stronger momentum in advanced chip manufacturing and growing demand for its 2nm GAA process.
Samsung has been working to improve yields on its next-generation 2nm gate-all-around technology, while its more established 4nm and 8nm semiconductor nodes are seeing higher utilization. These improvements are important because stronger production efficiency and better factory usage can help narrow losses in the foundry business. However, internal challenges may slow Samsung’s turnaround.
Han Jin-man, President of Samsung’s Device Solutions division, reportedly told employees that the foundry business is unlikely to return to profit as early as next year. Instead, 2028 is being viewed as a more realistic target for Samsung Foundry to finally move into the black.
The company has reasons to be optimistic. Demand for Samsung’s 2nm chips is expected to rise sharply, with orders estimated to increase by around 130 percent. That kind of growth could give Samsung a much-needed boost as it tries to compete more aggressively in the global semiconductor manufacturing market.
Still, the path forward is far from simple. Han pointed to several obstacles affecting Samsung’s foundry profitability, including performance-based bonuses, a business structure too heavily focused on mobile chips, weak profitability in some order categories, insufficient technological maturity, and strategies that have not delivered the expected results.
One major issue appears to be Samsung’s bonus system, which reportedly uses 10.5 percent of annual operating profit for performance-based payouts. While rewarding employees is important, especially in a highly competitive semiconductor industry, these payments can also make it harder for the foundry division to reduce losses quickly.
Samsung is in a delicate position. Its memory business has benefited from the artificial intelligence boom, helping the company recover some financial strength. Strong demand for memory chips, especially those used in AI servers and data centers, has brought fresh momentum to Samsung’s semiconductor division.
However, employees have also pushed for a greater share of those profits. Earlier labor tensions reportedly included the threat of an 18-day strike, which was eventually brought to an end, though not before production was disrupted. This shows how difficult it can be for Samsung to balance employee expectations with the need to improve long-term profitability.
For Samsung Foundry, stabilizing 2nm yields remains one of the biggest priorities. Advanced chip customers want reliable production, strong performance, and competitive pricing. Without consistent yields, Samsung may struggle to win major orders from companies that currently rely on TSMC.
At the moment, Samsung is often viewed as a secondary option rather than a direct replacement for TSMC. The company has access to cutting-edge manufacturing technology, but customers may hesitate to move large chip orders unless Samsung can prove that its yields, efficiency, and production capacity are strong enough. Industry expectations suggest that Samsung may need to reach yields around the 70 percent range before it can seriously challenge TSMC for top-tier clients.
The upcoming Exynos 2700 could become an important test for Samsung’s 2nm GAA process. If the chip delivers major improvements in performance and power efficiency, it could help rebuild confidence in Samsung’s foundry technology. A successful Exynos 2700 would not only benefit Samsung’s mobile division but also serve as a showcase for the company’s advanced manufacturing capabilities.
However, Qualcomm remains a major factor. If Qualcomm continues offering attractive pricing or discounts on future smartphone chipsets, Samsung’s own mobile strategy could become more complicated. That could make it harder for Samsung to rely on internal chip production as a way to strengthen its foundry business.
Samsung’s foundry comeback will depend on more than just advanced process technology. The company must improve yields, attract higher-margin customers, refine its business strategy, and manage internal costs without damaging employee morale. If it can solve these problems, 2028 could become the turning point Samsung is aiming for in its battle to become a stronger competitor in the global chip manufacturing industry.
