Reports: Samsung cutting 30% of foundry staff, 50% of production lines

Business news | November 4, 2024

By Peter Clarke

foundry semiconductor

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Samsung Foundry is shutting down semiconductor production lines with the aim of closing 50 percent by the end of 2024 to cut costs, according to Chosun Daily.

This is being done to save costs while fabs have low manufacturing utilization rates, the report states.

The report quotes unnamed industry insider saying: “Samsung has publicly indicated it would keep the facilities on at lower utilization, but in reality, the company is gradually shutting down lines. The current plan is to reduce operations to around 50 percent by the end of the year.”

Samsung has already shut down more than 30 percent of its 4nm, 5nm, and 7nm foundry production lines at Pyeongtaek Line 2 and Line 3.

Although the Chosun report says the closures are temporary, Digitimes has reported that Samsung Foundry has launched a four-round voluntary retirement program, aiming to cut more than 30 percent of its foundry workforce.

Samsung recently published weak financial results that indicated problems in the non-memory side of its chip manufacturing. Analysts estimate that the foundry operation may have lost a trillion won (about US$730 million) in the 3Q24, Chosun reported.

Samsung’s problems include weaker than expected orders for 5nm and 4nm chips from Chinese customers and an inability to pick up leading-edge orders from global fabless leaders such as Nvidia, AMD and Qualcomm.

The head of Samsung’s semiconductor division Jun Young-hyun has reportedly begun a series of meetings with the senior executives responsible for the memory, LSI, foundry, semiconductor research and staffing ahead of a year-end staffing changes.