Company outlines restructuring priorities as it strengthens advanced-node production and improves the quality of its customer portfolio.
June 17th, 2026 — Samsung Electronics expects its foundry business to remain under financial pressure through 2027, with a return to profitability now considered more likely in 2028.
Han Jin-man, president and head of Samsung Electronics’ foundry business, reportedly presented the outlook during an internal management briefing held for employees on June 12. His comments suggest that Samsung’s internal expectations are more cautious than some market forecasts, which have indicated that the foundry operation could potentially break even as early as 2027.
Industry analysts expect Samsung’s non-memory semiconductor operations, including the foundry and System LSI businesses, to narrow their combined losses during 2026. However, the divisions are still projected to record an operating deficit of between 2 trillion won and 3 trillion won, equivalent to approximately US$1.3 billion to US$2 billion.
Samsung’s foundry business continues to face challenges related to its dependence on mobile applications, the profitability of some existing contracts, the maturity of its process technologies and the commercial strategy for legacy nodes. Additional labor-related expenses may also increase the cost burden following the introduction of a new semiconductor performance-based compensation program.
According to the report, the new incentive scheme will be funded using 10.5% of the semiconductor division’s business performance and will be paid to employees in Samsung treasury shares after taxes.
Han reportedly acknowledged management’s responsibility for the foundry division’s losses and emphasized that stronger business performance would be necessary before employee compensation could be improved further.
Samsung plans to pursue a two-track strategy focused on strengthening its position in advanced manufacturing processes while establishing a more sustainable business model for mainstream nodes.
The company is also reviewing the long-term role of its profitable 8-inch foundry operation. Although the business currently generates earnings, Samsung reportedly considers the market increasingly competitive and may gradually reduce its participation. Samsung is simultaneously working to improve the profitability of its customer portfolio. Some contracts secured during the supply shortages associated with the COVID-19 period were reportedly agreed at relatively low prices. More recently, however, the company has been attracting customers offering stronger margins.
The ability to secure large advanced-node customers will be an important part of Samsung’s recovery plan. Samsung is preparing a manufacturing facility in Taylor, Texas, that is expected to support 2-nanometer semiconductor production. Initial operations are scheduled to begin toward the end of 2026, followed by volume production for major customers from 2027.
The company previously announced a US$16.5 billion agreement to manufacture Tesla’s next-generation AI6 processors. Samsung is also expected to produce language processing units for AI chip company Groq, while industry speculation has linked the foundry with potential manufacturing work for future Google tensor processing units. These projects could help Samsung increase utilization of its advanced-node capacity, improve its customer mix and reduce the foundry division’s losses.
However, the 2028 profitability target shows that management expects the turnaround to require more than new orders alone. Samsung will also need to improve process execution, control operating costs and establish a more competitive structure across both advanced and mature semiconductor technologies.
