Samsung Electronics, the South Korean appliance and consumer electronics corporation, reports its financial records for the fourth quarter and the fiscal year 2024. In the quarter ending on December 31, 2024, Samsung Electronics reports a consolidated revenue of KRW 75.8 Trillion (USD 52 Million) and an operating profit of KRW 6.5 Trillion (USD 4.4 Million) as its chip business struggles to pace up. 

For the year 2024, its annual revenue remains KRW 300.9 Trillion (USD 206743 Million), and its Operating Profit is KRW 32.7 Trillion (USD 22,468 Million), the second-highest annual revenue on record, surpassed only by 2022. However, its Quarter-on-Quarter (Q-o-Q) revenue and operating profit records have both registered a slump. Finally, Samsung’s Foundry business, or the Semicon division also records a decrease in profit owing to less utilization and higher R&D costs of its chips. 

Samsung: Why is its Foundry Business Suffering?

Samsung Foundry division hasn’t seen any success, since its launch in 2019 as it struggles to bag big orders from companies to fill its capacity. A vision that was ushered to put Samsung at the center of Contract Chip manufacturing has made it suffer tremendous losses since. 

Last year, Samsung reported a 3.18 trillion won ($2.4 billion) operating loss in its foundry and System Large Scale Integration (LSI) businesses, based on the average estimates of nine analysts, Reuters reports. This is because the chips made by the company find less recognition in the market which also reflects badly in its overall financial performance. 

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Samsung: “No Plans to Spin off”

In an interview with Reuters, Samsung’s Chairperson Jay Y. Lee said, "We are hungry to grow the business. Not interested in spinning (them) off." Samsung's efforts to expand into logic chip designing and contract chip manufacturing are motivated by its approach to lower its reliance on bread-and-butter memory chips and explore other prominent verticals.

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It seems Samsung is not interested in doing away with its Foundry division rather seems focused on getting something new and innovative in place through its robust research and development efforts. It stands at a crossing road where creating a separate Foundry division, although it needs this to gain the trust of the market, will render the division non-feasible while retaining it will lead it to suffer perpetual losses year-on-year.