First time in three years! Samsung’s wafer foundry turns profitable in June, with 4nm process yield rate increased to about 80%

First time in three years! Samsung’s wafer foundry turns profitable in June, with 4nm process yield rate increased to about 80%

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Samsung Electronics’ wafer foundry business, after years of losses, has finally seen a turning point.

According to sources in the Korean semiconductor industry, Samsung Electronics’ wafer foundry division achieved a monthly profit in June this year, marking the department’s first monthly profit since 2023. The sustained increase in shipments of HBM (High Bandwidth Memory) base dies, combined with significant improvements in 4nm process yields, have jointly driven this turnaround.

This positive momentum has made Samsung internally optimistic about turning a quarterly profit in the third quarter. Meanwhile, the company is accelerating its client base expansion in the AI chip foundry sector—after the Tesla AI6 chip order, production for Groq chips and potential collaborations with Meta and Anthropic have surfaced, further elevating market expectations for Samsung’s wafer foundry business recovery.

Monthly profit, quarterly turnaround expected in Q3

Samsung Electronics’ wafer foundry division achieved a monthly profit in June this year, the first time since 2023. The department had long been under pressure—issues like low yield rates in advanced processes, the loss of major clients, and low capacity utilization had compounded, leading to continued losses. Samsung does not separately disclose the financials of the foundry division, but market estimates suggest that the combined operating loss of the wafer foundry and System LSI divisions was about 2.5 trillion KRW in 2023, expanded to 5.3 trillion KRW in 2024, and is projected to rise further to about 6 trillion KRW in 2025.

For the second quarter overall, losses persisted in April and May, so a quarterly turnaround remains uncertain. However, since the profit in June was not a one-off settlement but stemmed from a sustained increase in capacity utilization and process yield improvement, Samsung internally believes the possibility of achieving positive quarterly profitability in Q3 is high.

HBM4 boosts 4nm utilization, yield improvement lowers unit costs

The core driving force for the monthly turnaround lies in the dual improvement of HBM base die shipment expansion and 4nm process yield.

The HBM base die is a logic chip at the bottom of the DRAM stack, responsible for signal communication with the GPU, and is produced on Samsung’s own wafer foundry lines. Increased HBM output directly raises base die wafer input, thereby boosting utilization on advanced process lines. In particular, the base die for HBM4 uses the 4nm process, creating a sustained supplementary order effect for the line. This February, Samsung Electronics was the first globally to achieve HBM4 mass production and commercial shipment, and in May delivered HBM4E 12-layer stack samples to clients worldwide.

The wafer foundry business is characterized by a high proportion of fixed costs such as depreciation, labor, and maintenance, so increased repeat shipments help raise equipment utilization and reduce unit costs. Meanwhile, industry insiders estimate that Samsung’s 4nm process yield has increased to about 80%. Higher yields mean more chips shipped per wafer input, reducing scrap and rework costs. In April and May, the cost pressures of early-stage capacity expansion and process stabilization persisted; by June, the combined effects of base die volume growth and 4nm yield improvement became evident, turning monthly profitability positive.

Key clients return, AI chip supply chain diversification brings new opportunities

The return to monthly profitability has coincided with improvements in wafer foundry order structure. Last year, Samsung Electronics’ foundry won the Tesla AI6 chip order, and recently undertook production of Groq-architecture AI inference chips announced by Nvidia. Additionally, Meta and Anthropic have also been cited within the industry as potential partners for Samsung’s AI chip foundry collaboration, further intensifying market expectations of the business’s recovery.

With demand for AI training and inference both growing rapidly, TSMC’s advanced process and packaging capacities have become highly saturated. Major technology companies, seeking to reduce their reliance on Nvidia, are expanding in-house AI chip designs while seeking to break away from a single-source dependency on TSMC. Against this background, Samsung, with its 2nm advanced process deployments, HBM base die capacity, and U.S.-based manufacturing, is gradually being seen as a prominent alternative supply chain option.

Despite signs of fundamental improvement, the gap between Samsung’s foundry and TSMC remains substantial. According to research institute TrendForce, in global wafer foundry market share for Q1 2025, TSMC leads with 72.3%, while Samsung is second with 6.5%. Compared to the same period last year, TSMC’s share rose from 67.6% by 4.7 percentage points, while Samsung’s declined from 7.7% to 6.5%, a drop of 1.2 points, further widening the gap from 59.9 to 65.8 percentage points.

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