May 28, 2025 /SemiMedia/ — Samsung Electronics is reportedly weighing the option of spinning off its wafer foundry operations from its semiconductor division, a move aimed at easing ongoing concerns over conflicts of interest from clients. Industry sources say customers such as Apple, Qualcomm, and Nvidia remain cautious about outsourcing to Samsung due to the company's dual role in both chip design (via System LSI) and contract manufacturing.

Samsung Foundry has ramped up its advanced node development, already applying 3nm technology and targeting mass production of 2nm chips within the year. However, despite being the world’s second-largest foundry, Samsung continues to struggle in winning major orders, trailing far behind market leader TSMC.

Analysts believe the structural conflict between design and manufacturing is a core reason for client hesitation. A foundry spinoff could help Samsung rebuild trust, unlock investment opportunities, and address persistent financial losses.

Internally, Samsung’s System LSI business has been under a comprehensive review since early this year by the company’s Global Research & Management Diagnosis Office. The evaluation is nearing its conclusion, and major organizational decisions are expected soon.

Industry speculation suggests that the mobile application processor (AP) team within System LSI may be merged into Samsung’s Mobile Experience (MX) division, which oversees smartphones and IT devices. However, if this proposal is rejected due to profitability concerns, an alternative being explored is reintegrating System LSI with the foundry unit—reverting to a pre-2017 structure. This could potentially cancel the plan to separate the foundry unit altogether, especially if Samsung opts to tightly align chip design with cutting-edge manufacturing in a bid to overcome the semiconductor downturn.