January 24, 2025 /SemiMedia/ — Samsung Electronics has announced a significant reduction in its wafer foundry investment for 2025, cutting the budget by more than 50% compared to 2024. The planned investment will total around 5 trillion won, down from 10 trillion won in 2024. This move follows a period of heavy investments from 2021 to 2023, during which Samsung spent about 20 trillion won to expand capacity and advance technology.

While Samsung had already signaled a more conservative investment approach in its Q3 2024 earnings report, the 2025 budget will still focus on the Hwaseong S3 and Pyeongtaek P2 plants. At S3, part of the 3nm production line will be transitioned to 2nm, and at P2, a 1.4nm test line with a capacity of 2,000-3,000 wafers per month will be installed by the end of the year. Additionally, Samsung plans minor investments to upgrade equipment at its Taylor, Texas plant.

The reduction in investment is mainly attributed to subdued customer demand, particularly in advanced process nodes. The yield issues and delays in advanced processes at Samsung’s Pyeongtaek foundry, which has seen a 30% decline in utilization for the 4nm to 7nm nodes, have exacerbated the situation. At the same time, Samsung faces increasing competition from TSMC, which invested approximately 42 trillion won in 2024, four times the amount spent by Samsung.

Industry experts suggest that Samsung’s strategic focus may not be on reducing investment overall, but rather on improving its 2nm technology to enhance its market position and address current technical challenges.