Samsung Electronics' foundry business is increasingly expected to turn a profit in the third quarter of 2026.
This shift is rooted in a structural change in the market. First, the explosive growth of the AI semiconductor market has pushed the capacity of market leader TSMC to its limits. TSMC's own CEO has acknowledged that it's difficult to meet all customer demand, signaling that the bottleneck in sub-5nm advanced processes and CoWoS packaging is likely to be prolonged. As a result, large fabless companies like AMD can no longer rely on a single source and have begun to actively pursue a 'dual foundry' strategy to secure a stable supply chain.
This is where Samsung Foundry emerges as a compelling alternative. Second, Samsung has prepared strong offerings with its 2nm process and HBM4 base die. The company is building trust with major clients, as evidenced by its recent official foundry collaboration with AMD and a visit from their CEO to Samsung's production lines. This is a clear signal that Samsung's technological competitiveness in the 2nm process is being recognized.
Furthermore, the ramp-up of HBM4 base die sales is a critical factor. HBM is a high-performance memory made by vertically stacking multiple DRAM chips. The base die, which controls the entire stack from the bottom layer, is manufactured using an advanced logic process, and its revenue is booked under the foundry division. With Samsung beginning HBM4 mass production and being highly likely to pass validation with key clients like NVIDIA, it is expected to directly contribute to earnings improvement starting in the third quarter.
Third, the increasing visibility of the Taylor fab's operational timeline in Texas is another positive sign. While full-scale mass production is targeted for 2027, the installation of equipment and pilot production runs starting in late 2026 will help alleviate the burden of massive initial fixed costs. It also signifies that Samsung has secured the production capacity to meet future client demand.
In conclusion, the potential for Samsung Foundry's Q3 turnaround is the result of these three converging factors: the opportunity created by TSMC's bottleneck, Samsung's technological strength in 2nm and HBM4, and the future production capacity of the Taylor fab. While the initial profit may be modest, it can be interpreted as a significant sign of a fundamental improvement in the business's health.
- Foundry: A semiconductor manufacturing plant that produces chips designed by other companies (fabless companies). For example, Samsung Foundry makes chips for clients like AMD or Tesla.
- HBM (High Bandwidth Memory): A high-performance memory created by vertically stacking multiple DRAM chips, used primarily in AI accelerators and high-performance computing.
- Base Die: The bottom-most logic chip in an HBM stack that controls all the memory layers above it. It's manufactured using advanced foundry processes.