Samsung Electronics’ foundry business, often referred to as the company’s 'sore spot,' is projected to recover from its financial losses with increasing orders from tech giants including Tesla, Nvidia, and AMD. This mounting optimism stems from the expectation that as Samsung gains more experience in fulfilling orders, its production yield will improve, leading to a beneficial cycle of receiving more work. Analysts are predicting that a successful recovery in the foundry sector, coupled with a booming memory chip market, could allow Samsung’s overall performance to surpass that of its rival, SK Hynix, within this year.

Industry insights suggest that Samsung's foundry division could return to profitability as early as the fourth quarter of this year, or at least by next year. While Samsung has not disclosed the exact extent of its losses in this sector, market estimates indicate that the foundry unit's deficit may have reached around 4 to 5 trillion KRW ($3.5 to 4.4 billion) in 2024, after approximately reducing its losses to between 1 and 2 trillion KRW last year, attributed largely to notable contracts such as the 23 trillion KRW ($20 billion) order from Tesla for its autonomous driving chip.

In addition, notable partnerships are forming within the sector. Nvidia has announced that its inference chip, ‘Grok3,’ will be manufactured by Samsung’s foundry, while AMD’s CEO Lisa Su has expressed intentions to discuss collaborative efforts in foundry production during her recent visit to South Korea. The ability of Samsung’s foundry division to consistently produce high-quality products tailored to client needs is critical, and the company asserts that it is stabilizing yields at the 4-nanometer level, with further advancements to a 2-nanometer process expected within the year. Tesla's CEO Elon Musk recently hinted at the potential readiness of the A16 chip for production by December, marking a significant milestone for Samsung’s manufacturing capabilities in this rapidly evolving industry.