Samsung Electronics' Foundry (semiconductor foundry production) division has lifted the ‘shutdown’ of production facilities and is reportedly planning to raise the operating rate of the Pyeongtaek Campus (P) foundry production line to maximum capacity starting as early as June this year. The operating rate is expected to recover as the volume related to the smartphone application processor Exynos from Samsung Electronics' System LSI division and orders for cryptocurrency mining machines from China have increased.
According to the industry on the 13th, Samsung Electronics' Foundry division has decided to lift the shutdown of the Pyeongtaek Campus foundry production line and increase the operating rate to maximum capacity starting in June. Orders for 4NANO (nanometer, 1 billionth of a meter) process volumes have surged, prompting plans to operate production facilities at ‘full capacity.’
The Foundry division conducted a shutdown of production facilities due to poor orders last year, suffering a deficit of trillions of won, and focused entirely on cost reduction. Last year, Samsung Electronics suspended about 50% of the 4NANO, 5NANO, and 7NANO foundry production facilities at the P2 and P3 plants of the Pyeongtaek Campus.
However, it has been reported that Samsung Electronics' Foundry division has lifted the shutdown on some production lines to increase the operating rate this month. As a result, most of the equipment that had been shut down is now in a state ready for operation. The adjustments in the operating rate have been influenced by orders for Exynos volumes from Samsung Electronics' System LSI division, the economic stimulus from China, and the production volume of ‘logic die’ that serves as the brain for the sixth-generation high-bandwidth memory (HBM4).
A source familiar with Samsung Electronics' situation noted, “We have turned on all the equipment that had been shut down and have begun product production,” adding that “from June, it is planned that the entire production facility will be utilized for product production at ‘full capacity,’ and preparations are underway for this.”
However, there are concerns that U.S. regulations against China could be a hurdle to recovering the operating rate. Currently, Samsung Electronics' Foundry division significantly relies on Chinese corporations for a substantial part of its revenue as it struggles with obtaining big tech orders for advanced processes of 3NANO and below. A major customer for Samsung Electronics' Foundry division’s 4NANO process is China’s Baidu. Samsung Electronics, which is closely monitoring U.S. sanctions against China, is reportedly pausing production of Baidu products. It is said that Baidu proactively purchased Samsung Electronics' HBM in preparation for the U.S. export regulations strengthening last year.
An industry insider noted, “Recently, Samsung Electronics temporarily halted production of Baidu products manufactured on its 4NANO production line,” adding, “Although it has not officially stopped shipments to Chinese corporations, it is presumed that the company is assessing the impact since the presidency of Donald Trump.”