Samsung considers merger of System LSI division with Foundry due to declining performance

Samsung Electronics may be undertaking a major reorganization within its semiconductor empire. According to South Korean publication SEDaily, the company’s management is considering a merger of its struggling System LSI division with the more stable Samsung Foundry business.

Samsung Electronics is considering a major reorganization within its semiconductor empire.

System LSI: weak link in semiconductor business

System LSI is responsible for designing Exynos processors, ISOCELL cameras, and other sensors. Despite the importance of these products, the division has been losing ground in recent years. At a recent meeting of Samsung’s top executives, three scenarios were discussed:

• The merger of System LSI with Samsung MX (mobile division),
• System LSI’s merger with Samsung Foundry (chip manufacturing),
• A large-scale restructuring of the division.

The most likely option, according to the source, was the second option – integrating System LSI back into Foundry, with which it had already been merged prior to 2017. Back then, the separation was to reduce conflicts of interest with customers like Qualcomm and Nvidia. Now, however, the company believes that close collaboration between the two teams is essential for the successful design and manufacture of chips below 2nm.

A brief guide to Samsung’s divisions

• Samsung Device Solutions (DS): brings together three key areas – memory, manufacturing (Foundry) and chip design (System LSI).
• Samsung Foundry: manufactures semiconductors for both Samsung and third-party customers.
• System LSI: designs chips and sensors, including Exynos and ISOCELL.
• Samsung MX: produces smartphones, tablets and wearable electronics.
• Samsung DX: responsible for televisions, home appliances and displays.

Risks and possible consequences

System LSI’s merger with Foundry could strengthen vertical integration within Samsung, but it could also cause unease among external customers. Companies like Qualcomm and Nvidia may question the confidentiality of their designs and switch to other vendors for fear of technology leaks.

System LSI’s merger with Foundry could strengthen vertical integration within Samsung, but also raise concerns among external customers.

The final decision has yet to be made. It must be approved by vice chairmen Jeong Hyun-ho (Business Support TF) and Jeong Young-hyun (Samsung DS), after discussion with Samsung Electronics Chairman J.Y.

The Samsung is considering merging its System LSI division with Foundry due to declining performance was first published on ITZine.ru.