Samsung's 3nm chip yields are so low its foundry division's future is in jeopardy

Samsung is a tech giant that develops and creates products and hardware, including everything from televisions to smartphones and biometric jewelry. The Korean company is also one of the biggest semiconductor manufacturers in the world; however, according to a new report in Business Korea, its foundry business is struggling.

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To the point where it's considering spinning off its foundry business entirely. This information comes from Samsung directly, with Samsung Securities (a subsidiary of the company) publishing a report titled 'Geopolitical Paradigm Shift and Industry' in July. The report also notes that it's struggling to keep up with TSMC, specifically regarding more advanced node technology.

The company's 3nm Exynos 2500 chip has a yield of only 20%, which makes it unlikely to appear in the Galaxy S25 net year. It's a yield so low that it just wouldn't be cost-effective to produce at any sort of scale - the number would need to sit at around 60% for this to be the case.

This also means Samsung will continue to lose out on contracts for advanced chips to TSMC, which is currently dominating the semiconductor industry with around a 62.3% share compared to Samsung's 11.5%. This means companies like NVIDIA, Apple, and Qualcomm are all doing their chip shopping at TSMC. To make matters worse, Samsung will post its third-quarter performance and results later this month, and it's predicted that its foundry business will report an operating loss of $385 million.

The report also suggests that Samsung is already reallocating personnel to its profitable memory business, so the plan could be to shift its foundry business to the U.S. as part of the spin-off.