[COX] Samsung Lands KRW 293 Trillion Broadcom Deal, Gets Chance to She…

Samsung Electronics signed a memorandum of understanding on July 24 (local time) with Broadcom regarding semiconductor cooperation worth KRW 293 trillion. / Photo generated by COXNEWS using Gemini (AI)

Samsung Electronics' KRW 293 trillion semiconductor partnership with Broadcom should not be viewed simply as "winning one big contract." Analysts say it could become an opportunity for Samsung Electronics' foundry (contract chip manufacturing) business, which has long been undervalued compared with TSMC in the leading-edge foundry market, to be reassessed. However, it remains a memorandum of understanding that sets the direction of cooperation rather than a binding supply agreement, meaning there are still conditions that must be met before it translates into actual volumes and business performance.

Samsung Electronics announced that it signed a memorandum of understanding with Broadcom at the AI Summit held at The Midway in San Francisco on July 24 (local time) to cooperate in memory, foundry, and packaging businesses worth more than KRW 293 trillion over five years through 2030.

Attendees at the signing ceremony included Han Jin-man, President and Head of Samsung Electronics' Foundry Business; Hock Tan, Chief Executive Officer of Broadcom; Samsung Electronics Chairman Lee Jae-yong; President Lee Jae-myung; executives from both companies; and government officials.

Ahead of the signing ceremony, Chairman Lee Jae-yong said during the main AI Summit event, "If the strengths of South Korea and the United States are combined into one, we will be able to innovate faster, grow bigger, and solve more difficult challenges," adding, "South Korea possesses unrivaled competitiveness in semiconductors and advanced device manufacturing."

Why Broadcom Chose Samsung

Broadcom is a company that designs semiconductors but does not manufacture them directly. Such companies are called fabless firms. Broadcom is a leading company that designs custom AI semiconductors for use by big tech companies such as Google and also participates in the development of Google's AI semiconductor TPU.

TPUs use HBM (High Bandwidth Memory), a high-performance memory technology that processes data quickly by stacking multiple layers.

Recently, big tech companies such as Google and Amazon have increasingly moved toward designing and using dedicated AI semiconductors tailored to their own needs instead of relying on Nvidia GPUs. Amid this trend, finding foundries capable of manufacturing these chips has become a challenge.

According to industry sources, TSMC's 2-nanometer process is already fully booked with AI semiconductor orders, leaving new customers facing waits until 2028 or 2029. In contrast, Samsung Electronics' Taylor, Texas plant plans to begin mass production of 2-nanometer semiconductors in the second half of 2026, giving it relatively more available capacity. This timing difference is cited as one of the reasons Broadcom chose Samsung Electronics.

From Memory to Back-End Processing, Samsung Handles Everything

One notable aspect of this partnership is that Samsung Electronics will handle memory, contract manufacturing, and packaging on its own. Normally, these three areas require separate contracts with different companies. It is similar to purchasing components from multiple suppliers and assembling them afterward.

Only integrated semiconductor companies that simultaneously operate memory and foundry businesses can provide such a service. TSMC, which specializes solely in contract manufacturing, cannot structurally replicate this combination. For Broadcom, the advantage is that it can entrust the entire process to Samsung Electronics without separately negotiating contracts and coordinating schedules with multiple companies.

Samsung Electronics explained that having one company oversee the entire process could also improve manufacturing precision. However, this remains Samsung's position, and industry observers believe it will take time before such claims are proven through actual yields and product quality.

This Is Not Samsung Foundry's First Major Order

This is not the first time Samsung Electronics' foundry business has secured a major customer. On July 28, 2025, Samsung Electronics disclosed that it had received orders worth KRW 22.8 trillion from a major global company for the period through December 31, 2033.

The counterparty was not disclosed due to confidentiality provisions, but industry speculation pointed to Tesla, given that few companies place orders of that size while avoiding exclusive reliance on TSMC.

In August 2025, reports also emerged that Samsung had won orders for image sensors destined for Apple products. A series of major orders had continued intermittently, and the Broadcom agreement has now become the largest in terms of scale.

Remaining Variables

This agreement is not yet a finalized supply contract but rather a memorandum of understanding—a commitment that establishes the direction of cooperation. For it to lead to actual mass production contracts and product shipments, Samsung Electronics must stably improve the yield of its 2-nanometer process, meaning the percentage of semiconductors produced successfully.

HBM supply remains tight across the semiconductor industry, so it will also be important to monitor how Broadcom's allocations are balanced against those of existing customers. As TSMC's production bottlenecks are not expected to ease anytime soon, the next key question is whether Samsung Foundry can turn this opportunity into tangible business results.