Tech giant Samsung Electronics' Device Solutions (DS) Division has reported a significant 40% drop in operating profit, recording 3.86 trillion won in Q3 2024 due to declining semiconductor demand and weak orders from U.S. and Chinese clients. In response, Samsung is temporarily halting certain foundry production lines, planning a reduction of about 50% by the end of the year, as reported by the Chosun Daily.
Sources indicate that Samsung has already shut down over 30% of its 4nm, 5nm, and 7nm production at its Pyeongtaek Line 2 and Line 3 facilities. Analysts estimate that the foundry business may have incurred a loss of approximately 1 trillion won ($724 million) in Q3. The company has opted to turn off power to specific lines, aiming to reduce operating costs rather than continuing at low utilization rates. This downturn is attributed to a drop in orders, especially from Chinese fabless companies impacted by U.S. trade restrictions, which have delayed projects ahead of the U.S. presidential election.
Compounding these challenges, Samsung has announced a four-round voluntary retirement program aimed at downsizing its workforce. Reports indicate that certain sections, particularly within the foundry division, will see significant cuts. For example, over 30% of employees in the 8-inch foundry and technology teams are expected to leave, with the option to receive severance benefits of around 400 million won, which includes four months' pay.
Despite these setbacks, Samsung plans to pursue 2nm Gate-All-Around (GAA) process production by 2025, with an additional focus on 1.4nm nodes by 2027 to remain competitive in the semiconductor sector.
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