Samsung Electronics is reportedly scaling back operations at its semiconductor foundry facilities, specifically targeting its 4 nm, 5 nm, and 7 nm production lines due to weak demand. This decision comes in light of significant financial losses, estimated to be in the tens of billions of won during the third quarter of this year, as the company seeks to reduce costs and streamline operations

According to industry sources, Samsung has already shut down over 30% of its production capacity of the above mentioned process nodes on its Pyeongtaek campus, with plans to increase this to nearly 50% by the end of the year.

Samsung Foundry is reportedly facing significant losses

According to South Korean publication ChosunMedia, the semiconductor division has struggled to secure sufficient mass production orders from major tech companies like Nvidia, AMD, and Qualcomm, leading to a reported deficit of 1 trillion won (roughly USD 724 million) in the last quarter. In an effort to minimize expenses, including electricity costs, the company is opting to turn off production equipment rather than maintaining idle operations.

This move reflects a broader industry trend, particularly as lower-than-expected orders from Chinese fabless semiconductor companies have affected production volumes in the 4 and 5 nm processes.

Increased U.S. regulations on semiconductor exports to China have prompted these companies to delay projects, exacerbating the situation for Samsung’s foundry business.

Experts warn that these shutdowns could weaken Samsung’s competitive position in the semiconductor market. As Samsung reallocates resources to its memory division, which has historically been more profitable, its foundry business may fall behind rivals like TSMC. Professor Lee Jong-hwan of Sangmyung University cautioned that this gap could hinder Samsung’s ability to catch up once market conditions improve.

Samsung itself is opting for more Snapdragon chips

Amidst these challenges in the foundry sector, Samsung appears to be pivoting away from its in-house Exynos chips in favor of Qualcomm’s Snapdragon processors. Reports indicate that the upcoming Galaxy S25 series may feature the Dimensity 9400 instead of the Exynos 2500. This shift suggests that Samsung is struggling to meet performance and profitability expectations with its Exynos line, leading to an increased reliance on Qualcomm’s offerings, even in home appliances where AI features are becoming essential.

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Samsung Electronics is reportedly exploring the addition of a ‘Slim’ model to its upcoming Galaxy S25 flagship lineup. This strategic move appears to be a direct response to the competitive landscape, particularly as Apple gears up to release its own ‘Slim’ / ‘Air’ variant with the iPhone 17 series next year.

According to industry sources, the slim model will build on the design principles of the Galaxy S25. Samsung has already done something similar with the recently introduced Galaxy Z Fold Special Edition, which is based on the Z Fold 6.

Samsung aims to release this new version to gauge consumer interest, and if it receives a positive reception, the company might consider expanding the slim concept into the Galaxy S26 series in 2026.

This approach reflects a broader strategy to revitalize a market that has seen stagnant demand due to minimal design changes over the years.

As smartphone performance has improved, many consumers struggle to recognize the differences between successive models. This lack of differentiation has contributed to stagnation in an already saturated market. Recognizing this challenge, Samsung appears poised to make significant design shifts, especially with the knowledge that Apple is also moving toward slimmer devices. The upcoming iPhone 17 ‘Air’ or ‘Slim’ model is thinner and slightly smaller than the existing Plus model, signaling a potential trend toward more compact smartphones.

A separate launch for the Galaxy S Slim?

The Galaxy S Slim is anticipated to debut in the second quarter of next year, following the launch of the standard Galaxy S25 models. This staggered release is likely designed to prevent cannibalization within the lineup while allowing Samsung to monitor the demand for slimmer smartphones effectively.

Creating thinner devices necessitates adjustments in components like displays and batteries, which could impact overall performance. Therefore, the upcoming models will be closely watched for how well they balance thinness with functionality.

In addition to the slim model, Samsung is reportedly considering a significant shift in its branding strategy, potentially marking the end of the iconic Galaxy name. This move, if confirmed, could redefine the company’s approach to its flagship devices, indicating a new era in Samsung’s smartphone offerings. The company’s efforts to innovate and adapt to changing market dynamics underscore the importance of staying relevant in a highly competitive industry.

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