Samsung Foundry to Cut Capital Expenditure for 2025 Amid Market Slump

Samsung Electronics has announced a significant reduction in its 2025 capital expenditure (CapEx) for its foundry business due to weak market demand and sluggish orders in some segments.

According to Korean media reports, Samsung's foundry CapEx for 2025 is projected at KRW 5 trillion, a sharp decline from the KRW 10 trillion allocated in 2024.

Conservative Investment Strategy

In its Q3 2024 earnings report, Samsung had already signaled a cautious approach to capital expenditures, citing plans to scale back spending in 2024. For 2025, the company plans only a modest increase in investments, focusing on maintaining its existing production infrastructure rather than embarking on large-scale capacity expansions.

Targeted Investments for 2025

Samsung's 2025 foundry investments will primarily focus on its Hwaseong S3 fab and Pyeongtaek PS fab, with key developments as follows:

S3 Fab (Hwaseong):
Some 3nm process lines will be converted to 2nm process. This adjustment involves adding equipment to existing production lines, rather than significant new investments or facility expansions.

Pyeongtaek P2 Fab:
The facility is set to install a 1.4nm process test line with a monthly capacity of 2,000–3,000 wafers. This initiative is part of Samsung’s push to remain competitive in advanced semiconductor manufacturing.

Taylor Facility (Texas, USA):
Modest investments will be allocated to expand equipment and improve the infrastructure at the Taylor wafer fab, ensuring that Samsung maintains a foothold in the U.S. market while preparing for future demand surges.

Outlook and Challenges

The sharp reduction in CapEx underscores the challenges Samsung faces in a highly competitive and volatile semiconductor market. While the company continues to advance its cutting-edge process technologies such as 2nm and 1.4nm nodes, it is adopting a strategic, efficiency-focused approach to balance investment risks with market realities.

As global demand for high-performance computing and AI-related semiconductors stabilizes, Samsung’s targeted investment strategy is expected to position the company for a market rebound while optimizing resources.