Did Samsung Just Land a $16.4 Billion Chip Order?
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Synopsis
Samsung Electronics has secured a remarkable 22.8 trillion-won ($16.4 billion) chip order from an undisclosed client, marking a significant milestone for the company. This contract represents the largest chip order in Samsung's history and is poised to invigorate its foundry division, which is striving to compete with TSMC.
Key Takeaways
- Samsung Electronics has secured a significant chip order valued at 22.8 trillion won.
- This order represents the largest in Samsung's history.
- The deal is projected to enhance Samsung's foundry division.
- Operating profit projections for the second quarter were not met due to foundry challenges.
- Samsung shares rose following the announcement, outperforming the KOSPI index.
Seoul, July 28 (NationPress) Samsung Electronics announced on Monday that it has successfully secured a substantial 22.8 trillion-won ($16.4 billion) contract to provide semiconductors to a significant yet undisclosed client.
In a formal regulatory statement, the South Korean technology leader revealed it has entered into a foundry agreement expected to conclude by December 31, 2033. The identity of the customer and the particulars of the arrangement were not disclosed due to management confidentiality, as reported by Yonhap news agency.
This contract represents 7.6 percent of Samsung's total revenue of 300.9 trillion won from the previous year and signifies the largest chip order that Samsung Electronics has ever received.
The agreement is anticipated to significantly enhance its foundry division, which has faced challenges in matching the performance of global leader Taiwan Semiconductor Manufacturing Company (TSMC).
Earlier this month, Samsung Electronics projected an operating profit of 4.59 trillion won and sales of 74 trillion won for the second quarter.
However, the operating profit fell short of market expectations, primarily due to underperformance in the foundry and the System Large Scale Integration (LSI) sectors.
Following this news, shares of Samsung Electronics surged by 2.43 percent, reaching 67,500 won as of 9:37 a.m., outperforming the broader KOSPI index's 0.26 percent decline.
In a related development, President Lee Jae Myung met with Samsung Electronics Chairman Lee Jae-yong last year, as stated by the presidential office, to discuss various trade and investment matters amidst ongoing trade negotiations between Seoul and Washington.
“President Lee continued his discussions with business leaders this week, following previous engagements,” said presidential spokesperson Kang Yu-jung in a written briefing, noting that the two had dinner together that day.
“They shared thoughts on a wide array of subjects without a predefined agenda,” she added.
This dinner meeting occurred as South Korea aims to finalize a trade agreement with the United States to reduce reciprocal tariffs of 25 percent on Korean products before the August 1 deadline, under a package deal encompassing trade, investment, and security cooperation.
Point of View
It’s crucial to recognize the significance of Samsung's massive chip order. This contract not only underscores Samsung's strength in the semiconductor sector but also highlights the competitive landscape against major players like TSMC. The potential boost to Samsung's foundry division could reshape market dynamics, making it a pivotal moment for both the company and the industry.
NationPress
30/07/2025
Frequently Asked Questions
What is the value of Samsung's recent chip order?
Samsung Electronics has secured a chip order valued at 22.8 trillion won, equivalent to approximately $16.4 billion.
Who is the undisclosed customer for Samsung's chip order?
The identity of the customer for Samsung's chip order has not been revealed due to management confidentiality.
How much does this order contribute to Samsung’s revenue?
This contract accounts for 7.6 percent of Samsung's total revenue of 300.9 trillion won from the previous year.
When is the contract with the undisclosed customer expected to be completed?
The foundry contract is set to be completed by December 31, 2033.
What impact is this order expected to have on Samsung's foundry division?
This order is expected to provide a significant boost to Samsung's foundry division, which has been striving to catch up with TSMC.
