New Delhi [India], May 30 : Samsung Electronics is likely to spin off its foundry business from the broader semiconductor division, on the same conflict of interest that separated Samsung Biologics from its biosimilar business and contract drug manufacturing, reports the Korea Herald.
Samsung's Device Solution (DS) division consists of memory chips, its foundry business (which manufactures chips for other companies), and System LSI (which designs logic chips, including Samsung's Exynos processors).
This dual role as both a designer and manufacturer has sparked worries about potential technology leakage to competitors who rely on Samsung's foundry services, such as Nvidia and Qualcomm.
"Trust is critical in the foundry business," an anonymous industry source told The Korea Herald. "For fabless companies... there's always concern that sensitive design data could be exposed to competitors. Spinning off the foundry business would reduce these risks and make Samsung more competitive."
According to market experts, Samsung plans to take out its foundry unit, arguing that organisational independence would help the company respond quickly to clients' demands and scale faster to keep up with technological advancement.
However, many argue that now is not the right time. Lee Jong-hwan, a system semiconductor engineering professor at Sangmyung University, noted that while a spinoff mirroring TSMC's specialisation would be ideal in principle, the currently loss-making foundry isn't in a position for such a move. "The company must first return to profitability and then consider a spinoff when it's ready. It's too early for now," he stated.
Last week, the biotech arm of Samsung Group, Samsung Biologics, also announced its spin-off off its biosimilar operations into a new holding company, separating them from its contract development and manufacturing organisation business to sharpen the strategic focus of each unit.
"A similar conflict of interest conundrum has long weighed on Samsung Electronics' Device Solution division, which houses three distinct yet interconnected semiconductor operations under one roof: memory chips, foundry and System LSI. While the foundry manufactures chips for fabless companies, System LSI is responsible for designing logic chips, including Samsung's own Exynos," Korea Herald said.
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