Samsung Foundry Expected to Turn a Profit in Q3 2026 After Four Years of Losses

A Long-Awaited Turnaround

Samsung Electronics' foundry division is poised to return to profitability as early as the third quarter of 2026, ending roughly four years of losses that have weighed on the company's semiconductor ambitions. According to Korean media reports, internal assessments and industry observers suggest the contract chipmaking unit could break even, or better, in the July to September window, sooner than many analysts had forecast.

Yields and Utilisation Lead the Recovery

The recovery has been building since early 2026. Foundry utilisation exceeded 80% in the first quarter, the highest level in over a year and a sharp improvement from 2025, when the division reportedly logged combined operating losses of around 7 trillion won. The gains have been powered by new customer wins and stronger yields on existing process nodes. Samsung has reportedly hit 2nm yields in the 55 to 60% range, and it is targeting a roughly 130% jump in 2nm-related orders compared with the prior year. The company moved its break-even target up to 2026, accelerating an earlier timeline.

Taylor, Texas and the 2nm Ramp

A central pillar of the strategy is Samsung's plant in Taylor, Texas, where equipment installation ceremonies took place in April ahead of 2-nanometre production. The facility is anchored by a multiyear contract worth $16.5 billion with Tesla to produce next-generation AI chips on the 2nm process, with mass production expected to begin in 2027. Margaret Han, vice president of Samsung Foundry's North American operations, confirmed the Taylor fab will begin production in 2027, with process roadmap details to follow at the Korea SAFE Forum on 1 July.

Riding a Broader Semiconductor Wave

The foundry rebound comes as Samsung's wider semiconductor business surges. The company posted a record first-quarter 2026 operating profit of 57.2 trillion won, driven largely by AI-related memory demand including high-bandwidth memory. Analysts at KB Securities project total operating profit of 327 trillion won for 2026. While the foundry unit remains a fraction of Samsung's memory earnings, it is a strategic priority as the company competes with TSMC for advanced chip contracts from technology firms seeking to diversify their supply chains. The challenge remains steep, with TSMC already in full-scale 2nm mass production, but a profitable Samsung foundry would reshape the competitive landscape for cutting-edge chipmaking.