Samsung Electronics' foundry (semiconductor contract manufacturing) division has lifted the temporary shutdown of its production lines and plans to ramp up utilization at its Pyeongtaek fab to full capacity as early as June. The company expects chip utilization rates to recover as demand increases for Exynos processors from its System LSI division and orders rise from cryptocurrency mining firms in China.
Samsung’s foundry division has decided to resume production at its Pyeongtaek fab, with plans to maximize capacity utilization starting in June, according to sources familiar with the matter on Feb. 13. The move comes as orders for its 4 nm process has been increasing, prompting the company to lift the production shutdown measures implemented last year.
In the second half of last year, the company shut down nearly 50% of production lines at its foundry facilities to cut costs. The foundry division recorded losses amounting to trillions of won due to sluggish demand. At its Pyeongtaek P2 and P3 plants, Samsung scaled back production of its 4 nm, 5 nm, and 7 nm foundry production lines by nearly 50%.
The foundry division lifted the shutdown measures on some production lines to increase utilization rates this month. The decision to resume production is driven by multiple factors, including increased demand for Exynos processors from Samsung’s System LSI division, a surge in orders from cryptocurrency mining firms, and the production of logic dies for next-generation high-bandwidth memory (HBM4).
“The company restarted operations on all the facilities that were previously shut down,” said a source with knowledge of the matter. “From June, all production facilities will operate at full capacity.”
However, U.S. trade policies against China could challenge Samsung’s efforts to restore production. Samsung’s foundry division relies on Chinese customers for a significant portion of its revenue, as orders from U.S. big tech companies for sub-3 nm advanced processes remain weak. The primary customer for Samsung’s 4nm process is China’s Baidu, which had preemptively stockpiled Samsung’s HBM last year in anticipation of tighter U.S. export controls. Samsung recently suspended production of Baidu products in response to U.S. sanctions on China.
“Samsung temporarily halted production of Baidu’s products on its 4nm production line,” said an industry insider. “While shipments to the Chinese company have not been officially suspended, the company is evaluating potential risks.”
