Disclaimer: We may earn a commission if you make any purchase by clicking our links. Please see our detailed guide here.

Follow us on:

Google News

Samsung Foundry’s Business in South Korea Hit By Global Economic Downturn

Join the Opinion Leaders Network

Join the Techgenyz Opinion Leaders Network today and become part of a vibrant community of change-makers. Together, we can create a brighter future by shaping opinions, driving conversations, and transforming ideas into reality.

Samsung Foundry’s design solution partners in South Korea, AD Technology, Gaon Chips, and Coasia, have been severely impacted by the global economic downturn. Its partners are cutting their spending to brace for an industry downturn.

Industry watchers believe that Samsung will likely follow its foundry rivals in reducing capital expenditures. But the smartphone giant will be flexible in the near term to meet slowing chip demand.

According to a report by South Korean media, THE ELEC, Samsung Electronics’ largest design solution partner ADTechnology had a turnover of 164.2 billion won and an operating profit of 4.4 billion won, which is half the revenue in 2021, and an operating profit fell by 61 percent.

But for Gaonchips, revenue will grow to 43.3 billion won, a 34.3 percent increase from 2021. The report highlighted that profitability declined. Its operating profit was only 3.9 billion won.

Gaonchip continued with its cost growth and spent more on hiring engineers, leading to lower profits. In regards to Coasia, it was the least profitable. The company’s revenue in 2022 is estimated to be 463.6 billion won and will increase by 21.8 percent compared to 2021. But Coasia’s operating profit saw a loss of 22.4 billion won, an increase of 9 billion won from 2021. The company attributed the loss to the chip business, lens module business, and LED business.

However, Samsung’s rival Taiwan Semiconductor Manufacturing Company’s (TSMC) design solution partners IDEAS and Alchip will have revenues of KRW 926 billion and KRW 581 billion in 2022, respectively. The report highlighted that TSMC’s revenue in the foundry field is higher than that of Samsung. Industry officials said Samsung foundry’s investment this year will likely be lower than in 2022, in the vicinity of the $9.7 billion seen in 2020 and 2021.

Furthermore, Citigroup Global Markets said in a recent research report that the chances of Samsung adjusting its chip supply strategy by slashing investments are growing as sharper-than-expected memory chip price declines are threatening to push the tech giant’s profitability below its breakeven point.


Partner With Us

Digital advertising offers a way for your business to reach out and make much-needed connections with your audience in a meaningful way. Advertising on Techgenyz will help you build brand awareness, increase website traffic, generate qualified leads, and grow your business.

Power Your Business

Solutions you need to super charge your business and drive growth

More from this topic