Samsung Electronics' system semiconductors, which have been posting quarterly losses in the trillions of won, are moving to rebound with its in-house mobile application processor (AP) "Exynos."
According to the industry on the 9th, Samsung Electronics recently began mass production of the mobile AP "Exynos 2600." The mobile AP, which serves as the brain of a smartphone, is a key element that determines smartphone performance. Exynos is an in-house–developed chip designed by Samsung Electronics' System LSI business unit and manufactured by the foundry (contract semiconductor manufacturing) business unit. Samsung Electronics is developing the Exynos 2600 based on the 2-nanometer process, and as yields have recently improved, it is said to have begun full-fledged preparations to install it in next year's Galaxy S26 series.
Depending on the success of the Exynos 2600, the performance of Samsung Electronics' system semiconductor business is also expected to change. The foundry business unit and the System LSI business unit are estimated to have posted quarterly losses of around 2 trillion won each since the fourth quarter of last year. The previous model, "Exynos 2500," which was being developed on a 3-nanometer process, failed to be installed in the Galaxy S25 series launched early this year due to yield and performance controversy. This led to a deterioration in first-half results for Samsung Electronics' system semiconductors, which invested massive expense in the Exynos 2500.
If the Exynos 2600 is successfully installed in the Galaxy S26 series, higher foundry utilization and improved results for the System LSI business unit can be expected. At the company-wide level, there is also the effect of enhanced cost competitiveness due to reduced mobile AP purchase expense.
In the first half of this year, the mobile AP purchase expense of Samsung Electronics' Device eXperience (DX) division was 7.7899 trillion won, up 29.2% from 6.0275 trillion won in the same period a year earlier. During the same period, the share of mobile APs in the DX division's total materials and supplies purchases also rose from 17.1% to 19.9%. With Qualcomm's mobile AP "Snapdragon 8 Elite" fully installed in the Galaxy S25 series, expense appears to have increased. To cut costs in the smartphone business, installing Exynos is essential.
The securities industry believes Samsung Electronics' system semiconductors sharply narrowed their losses in the third quarter of this year. Kim Gwang-jin, a researcher at Hanwha Securities, said, "Third-quarter operating loss in Samsung Electronics' non-memory institutional sector will be 500 billion won, down by about 2 trillion won from the previous quarter," and estimated that "overall utilization of advanced nodes at 7 nanometers and below will rise, quickly reducing the burden of fixed costs."
Samsung Electronics recently fired a signal flare for a foundry rebound by signing a contract worth about 23 trillion won with Tesla to produce the next-generation chip "AI6." It is said to be boosting overall foundry utilization as it continues to win orders even in mature nodes of 4 nanometers and above.