Samsung wants to stay in the chip-making game even though it's costing billions

Despite its desire to overtake TSMC as the world’s leading contract chipmaker, Samsung has had difficulty finding financial success with its chip manufacturing businesses. Analysts claim that Samsung’s chip operations are dragging down the company’s overall performance, as it loses billions annually. Regardless of these losses, Samsung says it won’t be spinning off its contract or logic chip businesses.

Samsung is the largest memory chipmaker in the world, but it has also been expanding into the logic chip design and contract chip space to lessen its reliance on memory chips. Since expanding into these areas, the tech giant has invested billions of dollars into building new plants. However, not everything appears to be going according to plan.

According to Reuters, sources claim Samsung has struggled to earn big orders to fill its new capacity. It’s reported that the chip manufacturing business (called foundry) and logic chip designing business (called System LSI) recorded an operating loss of 3.18 trillion won (~$2.4 billion) last year.

While that doesn’t sound great for business, Samsung Chairperson Jay Y. Lee told the outlet they have no interest in spinning off the contract or logic chip businesses. “We are hungry to grow the business. Not interested in spinning (them) off,” Lee said.

For now, it seems Samsung is prepared to take on the ongoing financial losses of its chip businesses. It’s estimated that these businesses will report a loss of 2.08 trillion won (~$1.54 billion) for 2024.