There are few orders for advanced processes. Samsung reportedly shuts down 30% of its 4, 5 and 7 nm production lines at Pyeongtaek P2 and P3 factories

On September 30, Korean media ChosunBiz reported on the 27th local time that Samsung Electronics has significantly adjusted its advanced process business strategy, reduced the scale of related operations, and closed 30% of the existing 457nm advanced process production lines at the Pyeongtaek P2 and P3 factories in South Korea.

In order to catch up with TSMC's share in the wafer foundry market, Samsung previously adopted a factory-first strategy of "building a wafer fab first and then taking orders." However, due to its own process disadvantages in energy efficiency and yield, it ultimately only won a few advanced process foundry orders from large fabless design companies.

This has resulted in Samsung Electronics having theoretical production capacity in advanced processes but very low actual shipments, which in turn led to a deficit of nearly 2 trillion won (IT Home Note: currently about 10.668 billion yuan) in the Foundry Business Department of Samsung Electronics' DS Division last year. Samsung had to change its course under this background.

▲ Samsung Electronics Pyeongtaek Campus

Samsung Electronics' Pyeongtaek P3 plant covers an area of ​​128,900 square meters. In addition to the foundry production line completed earlier this year, it can also produce DRAM memory and NAND flash memory. Samsung Electronics had previously planned to further expand its foundry capacity at the two new factories in Pyeongtaek, P4 and P5, but with the postponement of equipment import orders, investment in new foundry projects has been effectively suspended.

Sources told Korean media that this seems to be the first time that Samsung has reduced its advanced process production capacity on such a large scale. Once these production lines are shut down, it will take a considerable time to fully restart.