TSMC’s U.S. subsidiary in Arizona has reportedly recorded a cumulative loss of 39.452 billion Taiwan dollars (approximately 1.7248 trillion won) over the past four years, deepening concerns for Samsung Electronics, which is building a foundry plant in Taylor, Texas.
Even TSMC, which is effectively monopolizing the foundry market, is recording significant losses, and since Samsung Electronics' foundry division has yet to secure any major customers, it is all but certain that losses will occur from the moment production equipment is brought in. The domestic business sites continue to face a series of losses every quarter, which means that Samsung’s foundry in the relatively more expensive U.S. will likely face an even more unfavorable situation.
According to industry sources on the 22nd, the construction progress of Samsung Electronics' factory in Taylor, Texas, is at 99.6%, and it is effectively completed. Normally, equipment would have already been brought in by now, but it is reported that Samsung Electronics is hesitant to place orders. While Samsung maintains that operations at the Taylor plant will start as planned in 2026, the outlook from both inside and outside Samsung indicates that revenue may be lower depending on market conditions and order status.
The process of bringing in semiconductor equipment is also expected to be challenging. The U.S. government had previously announced a tariff of at least 25% on semiconductors, and given the importance of these items to national security, it appears likely they will not negotiate with other countries. As a result, there is a greater possibility that semiconductor equipment will be subject to tariffs of over 25%.
A source familiar with Samsung Electronics noted, “Typically, equipment is brought in within 3 to 6 months after the factory is completed, and given that Samsung has been continually delaying the investment in equipment, the likelihood of facing high tariffs at the time of equipment import seems substantial,” adding, “It is also difficult to dispatch limited personnel to the U.S., meaning that there will be considerable expenses involved in recruiting human resources.” Additionally, the price of ASML’s extreme ultraviolet (EUV) equipment can reach up to 500 billion won per unit, with tariffs amounting to hundreds of millions of won.
Looking at the situation of competitor TSMC alone suggests that the profitability of overseas factories may significantly hinder long-term prospects. TSMC has begun full-scale operations at its U.S. plant, yet continues to face worsening profitability. This is due to higher labor costs compared to Taiwan and substantial additional investments needed for equipment. After the U.S. announced its tariff policy, TSMC Chief Executive Officer (CEO) C.C. Wei met with President Trump on March 3 to announce a plan for an additional investment of $100 billion (approximately 145.9 trillion won).
TSMC is reporting losses not only in the U.S. but also at its Kumamoto plant in Japan. The losses for TSMC’s Japanese subsidiary JASM have reached 4.38 billion Taiwan dollars (192 billion won), a record high. The Kumamoto plant has been producing general-purpose semiconductors of 12 nanometers or more since the end of last year. TSMC’s European outpost, the Dresden plant in Germany, is also reported to have incurred a loss of 500 million Taiwan dollars (22 billion won).
Meanwhile, Samsung Electronics' foundry division is estimated to have recorded an operating loss of approximately 2 trillion won in 2023, following a staggering operating loss of 4 trillion won last year, which was double the previous year’s figure. Analysts expect the division to continue facing a loss of around 3 trillion won this year. Since Vice Chairman Jeong Young-hyun took charge of the institutional sector (semiconductors), there has been a trend of restraint in foundry capital investments. Investments in the new P4 line at the Pyeongtaek campus, its main production line, have also been delayed due to equipment import issues, making it difficult for executives to easily decide on investments in U.S. plants where the cost risks are even greater.