Samsung Foundry gains momentum as rising AI chip orders and new US manufacturing capacity improve its outlook.
Samsung Foundry is showing signs of a long-awaited turnaround. After recording heavy losses for several years, the chip contract manufacturing division is now expected to move into profit as early as next year. Growing orders from global technology leaders such as Tesla, Qualcomm, and AMD are helping to improve the outlook, along with better performance from Samsung Foundry’s advanced manufacturing processes.
Industry experts believe that stabilizing production yields at advanced nodes and the upcoming launch of Samsung’s large US manufacturing site will play a key role in this recovery.
A Business That Has Struggled Since 2022
Samsung Foundry has been one of the weakest parts of Samsung Electronics’ semiconductor division in recent years. Since 2022, the unit has reported losses worth several trillion won due to low utilization rates and weak yields at cutting-edge process nodes such as 3 nanometers and below. Those issues forced several major customers to move orders elsewhere, mainly to Taiwan Semiconductor Manufacturing Company, which currently dominates the global foundry market.
That situation now appears to be changing. According to industry sources, Samsung Foundry is expected to benefit from rising demand for artificial intelligence chips and a more stable manufacturing process. Analysts say these factors could push the business back into the black in 2026.
Analysts See a Turnaround on the Horizon
Kim Dong Won, head of research at KB Securities, said Samsung Foundry’s losses could turn into profits next year as production ramps up. He explained that higher factory usage driven by expanded supplies of Tesla AI chips is likely to play a major role. Last year alone, Samsung Foundry is estimated to have posted losses of around 7 trillion won. A shift to profit would mark a major change in direction.
A person familiar with Samsung Foundry’s operations confirmed that the company is accelerating customer orders with a clear goal of becoming profitable next year. Production yields for advanced processes at 3 nanometers and below have improved, while utilization rates for the more profitable 4 to 8 nanometer nodes are now close to full capacity.
The Taylor Fab as a Key Turning Point
Much of the optimism surrounding Samsung Foundry is linked to the launch of its new manufacturing site in Taylor, Texas. Samsung Electronics is investing more than 37 billion dollars in the Taylor facility by 2030, making it one of the company’s largest overseas semiconductor projects. Mass production is scheduled to begin in the second half of this year.
Engineers are currently being deployed, and pilot production lines are expected to go live in the first half of the year. Once fully operational, the Taylor fab is expected to attract orders from major US-based technology companies. Samsung Foundry sees the Taylor plant as a strategic base to strengthen its position in the global foundry market.
Tesla AI Chips to Drive Growth
One of the most important customers for Samsung Foundry is Tesla. Samsung has already confirmed that it will mass-produce Tesla’s next-generation AI chips. Starting next year, Samsung plans to manufacture the AI5 and AI6 chips, which will power Tesla’s humanoid robot Optimus, its robotaxi platform, and future autonomous driving systems.
Industry sources say the AI6 chip will be produced exclusively by Samsung Foundry, giving the company a strong and stable revenue source. Large volume AI chip orders like these are expected to significantly improve factory utilization and margins.
Qualcomm and AMD Orders Gain Momentum
Beyond Tesla, Samsung Foundry is also seeing renewed interest from Qualcomm and AMD. Qualcomm has a long history with Samsung Foundry and maintains close ties with Samsung’s mobile division. However, Qualcomm shifted some production away in recent years due to low yields at advanced nodes.
As Samsung’s 2-nanometer process becomes more stable, the chances of winning back Qualcomm orders are increasing. AMD is also reportedly exploring dual sourcing strategies. While AMD has traditionally relied on TSMC, growing demand and supply constraints are pushing the company to consider Samsung Foundry as a second manufacturing partner.
TSMC Capacity Limits Open New Opportunities
Another factor working in Samsung’s favor is the tight capacity at TSMC. The Taiwanese firm holds around 70 percent of the global foundry market and has seen its production lines reach near saturation. As demand for advanced chips continues to surge, prices at TSMC have risen sharply. Some customers now face delays or uncertainty about supply.
This has encouraged major technology firms to consider alternatives. Samsung Foundry’s ability to offer advanced processes at competitive pricing makes it an attractive option. Using Samsung’s US-based Taylor fab may also help customers align with US manufacturing policies that favor domestic production.
Mature Nodes Add to Profitability
Samsung Foundry is also benefiting from strong demand at its mature 4 to 8 nanometer nodes. These processes offer stable yields and solid profit margins compared to cutting-edge nodes. Samsung uses these nodes to manufacture logic chips for high-bandwidth memory, as well as processors for companies such as IBM and Nintendo. Performance and pricing at these nodes are considered competitive with TSMC, helping to support overall profitability.
A Stronger Outlook Ahead
With improving yields, rising customer interest, and new manufacturing capacity coming online, Samsung Foundry appears to be entering a recovery phase. While challenges remain, industry experts believe the company is now in a much better position than it was just a year ago. If execution stays on track, Samsung Foundry could return to profit and reestablish itself as a serious competitor in the global chip manufacturing market.
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