Samsung’s once-proud semiconductor design unit, System LSI, is now at a critical inflection point. After years of setbacks including missed roadmaps, lost design wins, and deepening quarterly losses, executives are mulling what could be its most consequential reorganization since the 2017 Foundry split. According to insiders, three options are on the table: merge it with Samsung MX, fold it back into Foundry, or overhaul the division while keeping it independent. The favorite appears to be a reunion with Foundry.
Internally, the stakes are massive. System LSI, responsible for Exynos APs and ISOCELL sensors, failed to secure a spot for its in-house Exynos 2500 chip in the Galaxy S25 lineup this year. That loss alone wiped out billions of won and undercut Foundry’s own revenue stream, since the chips were no longer being manufactured in-house. This dual hit is reportedly why the Foundry-LSI reunion is gaining momentum.
For context, the two units were a single entity under Samsung’s DS (Device Solutions) division until 2017, when Foundry was spun off to appease clients like Qualcomm and Nvidia. Keeping Samsung’s chip design and manufacturing arms separate helped ease fears of IP leakage. But now, as both units struggle with profitability and Samsung races toward the sub-2nm era, internal voices are calling for tighter integration, possibly even at the cost of customer trust.
Samsung’s MX division, home to its Galaxy devices, was briefly floated as a potential landing zone for Exynos development. But insiders say MX wants no part of a bleeding SoC team. Meanwhile, the newly formed Business Diagnosis Office has been auditing System LSI since January, with final decisions expected soon. Key discussions will likely involve Vice Chairmen Jeon Young-hyun and Chung Hyun-ho, and ultimately, Chairman Jay Y. Lee.
Whichever path Samsung takes, it will not be easy. The Foundry merger could unsettle fabless clients who fear their proprietary chip designs may be exposed. But in a market defined by shrinking process nodes and rising costs, survival may demand uncomfortable compromises.
In related news, a new leak suggests that One UI 8 will be the final major update for select Samsung devices, while the upcoming Galaxy Z Flip 7 is expected to feature the Snapdragon 8 Elite chip in most regions.
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