Samsung Plans 8-Inch Foundry Exit by 2030 as Chip Customers Seek New Capacity

A planned retreat puts everyday chips under pressure

Samsung Electronics plans to close its remaining 8-inch wafer foundry production lines by the end of 2030, redirecting staff and equipment investment toward advanced manufacturing using 12-inch wafers. The shift would leave customers seeking new factories for chips that control power, operate displays and perform basic electronic tasks.

The first major step is the planned closure of the S7 factory at Samsung's Giheung campus in South Korea in the second half of 2026. S7 has estimated monthly capacity of about 50,000 wafers. Its shutdown is expected to bring Samsung's total monthly 8-inch capacity from roughly 250,000 wafers to below 200,000.

Samsung has reportedly notified customers of the broader withdrawal and stopped accepting orders for new 8-inch products. The company has yet to publicly confirm the end of 2030 as the deadline for closing every line. Existing customers face a gradual transition, with S6 and S8 initially remaining in operation after S7 closes.

The timing creates a difficult supply problem. Demand for power management chips used in artificial intelligence equipment is rising, while other manufacturers have limited room to absorb displaced orders. South Korean chip designers that have relied on Samsung must now find production slots, arrange technical changes and have replacement manufacturing approved.

Taiwan's United Microelectronics Corporation, or UMC, is a potential recipient because it already manufactures chips for Samsung's System LSI business. The commercial opportunity depends on whether suitable capacity is available and whether customers can complete the work needed to move their products.

What Samsung is closing, and when

Samsung operates three 8-inch factories at Giheung: S6, S7 and S8. Earlier plans called for S7 to close during 2026 while the other two continued operating. The broader withdrawal would extend that reduction to the entire business.

The reported sequence gives customers several years to prepare, although the first capacity reduction comes much sooner:

• 2026: Samsung stops accepting orders for new products on its 8-inch manufacturing lines.
• Second half of 2026: S7 is scheduled to close, removing about 50,000 wafers of monthly capacity.
• After S7 closes: S6 and S8 initially continue operating, with combined monthly capacity expected to fall below 200,000 wafers.
• By the end of 2030: Samsung plans to finish closing the remaining 8-inch lines.

Samsung foundry division vice president Kang Seok-chae said during a first quarter earnings call that the company would progressively close 8-inch production lines making power semiconductors, display driver chips and image sensors. The planned end date turns that gradual reduction into a broader transition for customers with products that may remain in production for years.

Which chips are affected?

Samsung's 8-inch manufacturing processes include 65, 70, 90, 130 and 180 nanometers. These figures identify generations of chipmaking technology. They help customers select a manufacturing process suited to a chip's electrical needs, size and cost.

The affected products include display driver integrated circuits, power management integrated circuits, microcontrollers and image sensors. Display drivers send the signals that make screens show pictures. Power management chips regulate electricity, microcontrollers perform control tasks, and image sensors turn light into electronic information.

Samsung's external customers include LX Semicon, ABOV and Dongwoon Anatech. Their immediate task is to secure manufacturing that matches the requirements of their existing designs, rather than simply buy space at any available factory.

A foundry manufactures chips designed by another business. An 8-inch wafer is a silicon disc about 200 millimeters across on which many chips are made together before being separated. These established production lines remain useful because many power, display and control functions depend on manufacturing features developed and refined over many years.

Why Samsung wants to move its resources

Samsung intends to concentrate staff and equipment spending on advanced processes using 12-inch wafers, about 300 millimeters across. The strategy directs resources toward the advanced manufacturing business it wants to prioritize as demand for sophisticated computing chips grows.

Han Jin-man, head of Samsung's foundry business, has described the competitive pressure facing its older wafer operations. He said the 8-inch foundry market had become:

increasingly crowded and price-driven

Samsung's remaining S6 and S8 plants are reported to be operating at approximately 70% capacity utilization. Utilization measures how much of a factory's available production capability is being used. That leaves Samsung facing a different operating picture from the tighter conditions described across much of the wider 8-inch market.

Samsung's decision also follows a gradual reduction in TSMC's 8-inch manufacturing activity, with related business moving toward Vanguard International Semiconductor. As major manufacturers focus investment elsewhere, companies that continue serving mature processes may gain orders and greater influence over prices.

How much capacity could disappear?

Estimates made earlier in the year put Samsung's monthly 8-inch capacity at approximately 250,000 to 270,000 wafers. The S7 closure estimate uses a starting point of 250,000 and projects a decline to below 200,000 wafers per month.

S7's stated capacity of about 50,000 wafers equals one fifth of the 250,000 starting figure. A fall below 200,000 would represent a reduction greater than 20%. The estimates come from different stages of the planned reduction, so the exact remaining total will depend on how Samsung adjusts the other lines.

TrendForce puts average 8-inch capacity utilization among the world's ten largest foundries at nearly 90%, supported by production reductions at major companies and demand for AI power management chips. Some manufacturers have already raised prices.

The gap between Samsung's reported 70% utilization at S6 and S8 and the nearly 90% industry figure helps explain the tension. Samsung sees a business it wants to shrink, while customers seeking replacement production face a market with much less room. A spare production slot is useful only when its process and delivery schedule fit the customer's chip.

Why moving orders takes more than a booking

South Korea's DB HiTek and SK keyfoundry are possible alternative suppliers, but much of their capacity is already allocated to existing customers. Korean chip companies seeking replacement production therefore face competition for manufacturing space at home.

Customers considering Taiwan or the United States also face limited spare capacity. Some Korean businesses have called for Samsung to delay the closures and for the South Korean government to help coordinate a response.

A transfer requires the receiving factory to make the chip reliably and meet the customer's specifications. Existing products may need design changes and fresh validation, the testing and approval process used to check that the resulting chips perform as required. That work adds time and expense before regular deliveries can begin.

The preparation period gives chip designers a chance to arrange alternatives, but each product needs its own production plan. Long supply agreements, early discussions with replacement foundries and technical qualification will matter as much as the final closure date.

Why UMC is a likely contender

UMC already has a manufacturing relationship with Samsung's System LSI division covering display driver and power management chips. That experience makes it a credible candidate for orders displaced by the withdrawal.

The relationship extends beyond 8-inch manufacturing. Samsung has also placed orders with UMC for image signal processors using a 28-nanometer process and for OLED display driver chips. Image signal processors handle data captured by a camera sensor, while OLED drivers control displays that use organic light emitting diodes.

Those existing arrangements give the companies experience working across different production platforms. Customers still need available capacity and a process suited to each design before a transfer can proceed. Expected business gains for UMC remain prospective rather than announced new orders.

Supply preferences may also shape the choice. Some customers seeking production outside mainland China have a narrower pool of alternatives, increasing the attraction of Taiwanese suppliers. Samsung's long relationship with UMC gives it an established option as it reduces its own manufacturing footprint.

Can 12-inch factories fill the gap?

A 12-inch wafer has roughly 2.25 times the surface area of an 8-inch wafer, calculated from the square of their diameters. That provides more space for chips, although actual output depends on chip size, manufacturing yield and the process being used.

For an existing Samsung customer, moving to a larger wafer can require a change in manufacturing technology as well as factory. Designs may need to be revised and tested again. The engineering expense and production terms can raise costs, particularly for established products whose economics depend on familiar processes.

Recent industry expansion has concentrated on 12-inch manufacturing, leaving 8-inch operators relying heavily on changes that remove production bottlenecks to increase output. Those improvements can add useful capacity, but replacing an entire departing supplier is a larger task.

Higher prices could improve earnings at manufacturers whose older equipment has already been largely depreciated, meaning much of its purchase cost has been recorded in their accounts. Customers, meanwhile, may face both higher wafer prices and the expense of moving production. The immediate challenge is securing dependable deliveries while Samsung shifts its investment toward advanced chips.

Key Points

• Samsung plans to withdraw from 8-inch foundry manufacturing by the end of 2030, with public company confirmation of the final deadline still pending.
• The S7 factory at Giheung is scheduled to close in the second half of 2026, removing about 50,000 wafers of monthly capacity.
• Affected products include power management chips, display drivers, microcontrollers and image sensors.
• Replacement capacity is constrained, and moving products can require design changes, testing and new supply agreements.
• UMC's existing relationship with Samsung makes it a potential recipient of orders, while Samsung redirects resources toward advanced 12-inch manufacturing.