Core Insights - Samsung Electronics is making significant strides in its foundry business, aiming to catch up with TSMC by stabilizing its 3nm technology and advancing towards 2nm processes [1][4] - The company is expected to achieve profitability in its foundry operations starting in 2027, driven by increased production rates at its Texas facility [4] Group 1: 2nm Capacity Expansion - Counterpoint Research predicts a 163% increase in Samsung's 2nm capacity, from 8,000 wafers per month in 2024 to 21,000 wafers per month by the end of next year [2] - The improvement in 2nm yield, estimated at 55% to 60%, has allowed Samsung to attract major clients, including a $16.5 billion contract with Tesla for AI6 chip production [2] Group 2: Competitive Positioning - TSMC holds a dominant market share of 70.2% in the foundry market, while Samsung's share is only 7.3% [3] - Samsung's introduction of Gate-All-Around (GAA) technology in its 3nm process enhances performance and power efficiency, positioning it favorably against TSMC, which will only adopt GAA in its 2nm process [3] Group 3: Flexible Pricing Strategy - TSMC's focus on major clients like NVIDIA and Apple has led to a 50% price increase for its 2nm wafers, creating an opportunity for Samsung to attract new customers with a flexible pricing strategy [3] - Samsung's foundry business is showing signs of recovery, having secured contracts with various companies, including AI semiconductor startups and major tech firms [3] Group 4: Future Outlook - Samsung anticipates a significant improvement in its financial performance as it ramps up production of 2nm technology and implements cost efficiency measures [4] - The company has reported record orders centered around advanced processes, indicating a positive trajectory for its foundry business [4]