Samsung Advances 8-Inch Foundry Exit to 2029

According to South Korean media outlet Dealsite, citing industry sources on November 12, Samsung Electronics is reportedly targeting an exit from its 8-inch wafer foundry business by the end of 2029, one year earlier than previously reported. The company has also reportedly outsourced part of its 8-inch wafer production to Taiwan-based United Microelectronics Corporation (UMC).

Samsung Electronics Vice Chairman and Head of its Device Solutions (DS) Division, Young-hyun Jun, had previously pushed to close the business by the end of 2028 to improve profitability. However, the timeline was later extended to 2029 to give customers more time to transfer their existing products to alternative manufacturing processes.

The latest timeline differs from a November 2 report by The Elec, which stated that Samsung had informed customers of plans to shut down its remaining 8-inch foundry production lines by the end of 2030. Samsung has not officially confirmed the 2029 target. On November 4, a company spokesperson told South Korean media outlet NewsPim that the withdrawal schedule was being coordinated individually with customers and could be extended upon request.

Samsung Reportedly Outsources Production to UMC

To reduce maintenance costs associated with aging equipment, Samsung has reportedly outsourced some 8-inch wafer production to other foundries, including UMC. The production volume, contract value, and implementation schedule have not been disclosed.

In its October 28 earnings announcement, UMC did not mention the reported arrangement with Samsung. The Taiwanese foundry reported a 92% overall capacity utilization rate in the third quarter of 2026, while wafer shipments increased 7.3% quarter over quarter to a record high of more than 1.2 million 12-inch equivalent wafers. UMC CEO Wang Shi also noted a significant recovery in the company's 8-inch business.

Samsung's 8-inch production lines primarily manufacture mature-node semiconductor products, including display driver ICs (DDIs), power management ICs (PMICs), and image sensors. However, rising equipment maintenance costs and stronger competition from Chinese foundries have put pressure on profitability. Samsung is therefore scaling back these operations and transferring some employees to more highly automated 12-inch production lines.

Samsung has also reportedly agreed to sell approximately 300 pieces of 8-inch manufacturing equipment from its closed S7 factory in Giheung, South Korea, to DB HiTek. Equipment dismantling reportedly began in early November, although the transaction value remains undisclosed.

Customers Face Challenges in Production Transfers

Moving existing semiconductor products to another foundry typically takes six months to one year because manufacturing processes must undergo adjustments and qualification. For products requiring redesign and additional preparation for mass production, the transition could take at least two years.

Alternative production capacity is also limited. Most capacity at South Korean foundries DB HiTek and SK Key Foundry is already occupied by existing customers. Moving production to 12-inch wafer lines could increase manufacturing costs and require chip design modifications.

Some customers also face restrictions on sourcing chips manufactured in China, further limiting their available manufacturing options.

Meanwhile, the global 8-inch wafer foundry market is becoming increasingly tight. According to industry data cited by DIGITIMES, the average capacity utilization rate of 8-inch production lines among the world's top 10 foundries reached 88% in 2026 and is expected to rise to 90% in the second half of the year.

An industry outlook released on November 11 forecasts that 8-inch foundries will continue operating near full capacity in 2027, driven by manufacturers' reductions in legacy production capacity and sustained demand for AI-related power management chips.

Samsung's planned withdrawal could add further pressure to the mature-node market, particularly for customers relying on 8-inch manufacturing for display driver ICs, power management chips, and other established semiconductor products.