Samsung Secures $16.5B Chip Manufacturing Deal

On July 28, Samsung Electronics announced it has signed a $16.5 billion (22.8 trillion KRW) chip manufacturing agreement with a large multinational company, whose identity remains confidential. This significant contract boosted Samsung's stock price by 3.5%.

The wafer fabrication deal, signed on July 26, represents about 7.6% of Samsung's projected revenue for 2024. While the contract's detailed terms won't be disclosed until its completion at the end of 2033, the agreement covers a period from July 24, 2025, through December 31, 2033.

This milestone comes as Samsung intensifies efforts to compete in the booming AI chip market—a sector that has recently affected the company's profit margins and share value. Meanwhile, South Korea is working to strengthen partnerships with the U.S. in semiconductor and shipbuilding industries, aiming to finalize trade talks that could eliminate or reduce tariffs of up to 25%.

Samsung's foundry business already serves notable clients such as Tesla and Qualcomm, while its larger rival TSMC counts Apple and Nvidia among its customers.

It remains unclear how this new order will impact Samsung's planned chip factory in Texas, which has faced delays amid challenges winning major contracts.

Lee Min-hee, an analyst at BNK Investment & Securities, noted that Samsung is focusing on ramping up production of its advanced 2nm technology, but this new contract is unlikely to involve that cutting-edge process.

Industry watchers point out that TSMC continues to erode Samsung's market share in foundry services, underscoring the technical hurdles Samsung faces in attracting high-profile clients away from TSMC through mastery of the latest chip manufacturing innovations.