Samsung's foundry business has begun what it calls a "three-stage rocket" to catch up with TSMC. It plans to secure more than 130 percent more 2-nanometre order tasks this year than last year and to start mass production of 1.4-nanometre chips by 2029.

Samsung Electronics recently disclosed a mid- to long-term roadmap for its foundry business in an earnings conference call, focusing on expanding orders, stabilising 2-nanometre mass production and laying the groundwork for early preparation for 1.4-nanometre. Samsung Electronics' foundry division said, "Following the Tesla order, we are actively discussing tasks with large customers in the United States and China, and this year we expect to secure more than 130 percent more 2-nanometre order tasks than last year, centred on high-performance computing (HPC) and AI applications."

Development of the 2-nanometre process is under way, with a goal of mass-producing second-generation products in the second half of the year. According to Samsung Electronics, the foundry has already begun a full ramp-up for mass production of new first-generation 2-nanometre products and has also started shipping 4-nanometre HBM base-die products.

Kang Seok-chae (강석채), a vice president in the foundry division, said, "Development is progressing smoothly, including achieving yield and performance targets." He said assessments and test-chip cooperation are being carried out with major customers, and that technology verification ahead of mass production is also proceeding as planned.

The 1.4-nanometre process is being developed as key milestones are achieved, with mass production targeted for 2029. Samsung Electronics plans to distribute version 1.0 of its PDK (Process Design Kit) to customers in the second half of next year to prepare in advance for customer needs. Considering that TSMC plans to mass-produce its 1.4-nanometre-class "A14" process in 2028, Samsung Electronics would be about one year behind.

Samsung Electronics' differentiation strategy is a "one-stop solution". Park Soon-cheol (박순철), chief financial officer, said, "The DS division is the only semiconductor company in the world capable of a one-stop solution with everything from logic to memory, foundry and leading-edge packaging," and added, "We will not miss securing leadership in the AI semiconductor market."

In particular, cooperation is under way to develop and mass-produce high-bandwidth memory (HBM) products that 3D-stack logic-process-based base dies and memory-process-based core dies. Samsung Electronics is also holding parallel discussions on products and commercialisation with many customers seeking a one-stop solution, and it expects to generate tangible results from a turnkey business model over the mid to long term.

It is also strengthening packaging technology. Samsung Electronics is working to secure advanced packaging competitiveness by building leading-edge 3D hybrid copper bonding technology. Construction is also under way for the Taylor fab in the United States, with a goal of bringing it online on schedule this year.

◆ Outlook for non-memory to return to profit in 2027... mature-process competition a variable

According to Kiwoom Securities, Samsung Electronics' non-memory division is expected to return to profit, moving from an operating loss of 3.6 trillion won in 2026 to an operating profit of 1.8 trillion won in 2027. The brokerage cited expectations that the Exynos 2700 will record a market share of about 50 percent in the Galaxy S27 and that yields will improve for the 2-nanometre (SF2P) process.

Given that the Exynos share in the Galaxy S26 is about 25 percent, that would be a doubling. Kiwoom Securities cited improved SF2P process yields, better benchmark performance and customers' growing need to reduce costs as reasons for the expected increase in Exynos 2700 share.

But there are variables. Samsung Electronics faces a dual challenge of narrowing the gap with TSMC in advanced processes while also coping with price competition from Chinese companies in general-purpose processes. Attention is on whether Samsung Electronics' foundry turnaround can clear two hurdles: expanding orders and improving yields. Kang said, "Competition in mature processes will continue to intensify as capacity expansion continues, centred on China."