According to the electronics industry on the 12th, Samsung Electronics’ Device Solutions (DS) division held a briefing on current management issues for the Foundry Business Division. At the meeting, President Han said, “The timing for loss-making divisions, such as the foundry, to return to profitability may be delayed until around 2029.” This implies that losses may persist even after reflecting the newly agreed-upon special management performance bonus.
This implies that the timing of the return to profitability could be pushed back due to the “special management performance bonus” recently agreed upon by Samsung Electronics’ management and labor. He emphasized that even in 2028, the company must make every effort to avoid continued losses. He also encouraged employees by noting that a return to profitability in 2028 can only be expected if the division continues to secure orders and deliver results.
It is interpreted that Samsung Electronics is taking a conservative view on the timing of its return to profitability due to increased costs resulting from the recent introduction of the special management performance bonus system.
In addition, President Han reportedly cited several reasons for the expected continuation of losses this year and next, including the special management performance bonus, the ongoing restructuring of the mobile application processor (AP) business, insufficient technological maturity, a low-margin order structure, and inadequate strategies for operating mature (legacy) processes.
Recently, Samsung Electronics’ management and labor union agreed through the 2026 wage negotiations to establish a special management performance bonus system funded by 10.5% of the semiconductor division’s business performance. The special management performance bonus will be paid entirely in company stock after taxes, subject to conditions set by the company.
Based on the results of these wage negotiations, assuming the DS division generates cumulative operating profits of 340 trillion won, employees in the memory business division are estimated to receive an average performance bonus of approximately 630 million won per person. In contrast, the expected performance bonus for employees in the foundry and System LSI business divisions—which are currently operating at a loss within the same DS division—is estimated at 180 million won.
Since the performance bonuses paid to employees are accounted for as labor costs for each business division, additional expenses are expected to arise. This is why internal assessments indicate that the return to profitability will be delayed.
President Han stated, “As the head of the business division, I feel a heavy sense of responsibility,” adding, “We have sufficient technological capabilities and expertise, so we will definitely be able to regain our competitiveness.”
The briefing was held simultaneously online and offline, allowing employees at domestic and international offices to participate in real time.
