# Samsung trims legacy chip lines as Chinese foundries expand *The South Korean chipmaker is cutting 8-inch wafer capacity by 20% at Giheung as low-cost Chinese competition accelerates a migration toward advanced 12-inch logic nodes.* **Published:** October 25, 2026 **By:** Ji-woo Han **Section:** Semiconductors & AI Hardware — South Korea **Source:** https://eastasiabrief.com/semiconductors/samsung-trims-legacy-chip-lines-chinese-foundries-expand-923 **Publisher:** East Asia Brief (https://eastasiabrief.com/) --- ## What to know - The contraction removes 50,000 wafers per month from Samsung's 8-inch production footprint. - The South Korean chipmaker is decommissioning its S7 line at the Giheung manufacturing complex south of Seoul. - Global 8-inch manufacturing capacity is projected to fall 2. ![Workers in protective cleanroom suits operate automated manufacturing machinery to process silicon wafers in a semiconductor fabrication plant. (AI-generated image)](https://eastasiabrief.com/media/2026-10-25-22505fc26361.webp) *Workers in protective cleanroom suits operate automated manufacturing machinery to process silicon wafers in a semiconductor fabrication plant. (AI-generated image)* Samsung Electronics moved Oct. 25, 2026, to accelerate the phase-out of mature-node semiconductor capacity as expanding Chinese foundries capture high-volume orders for legacy power and display chips. The contraction removes 50,000 wafers per month from Samsung's 8-inch production footprint. The reduction represents a 20% decline in the company's total 200-millimeter capacity, dropping monthly output from 250,000 wafers to below 200,000. The South Korean chipmaker is decommissioning its S7 line at the Giheung manufacturing complex south of Seoul. The site previously operated three 8-inch fabrication lines alongside advanced research cleanrooms. Global 8-inch manufacturing capacity is projected to fall 2.4% year on year across 2026, according to TrendForce data. Samsung and Taiwan Semiconductor Manufacturing Co. (TSMC) account for almost all of the net capacity withdrawals. Utilization rates across Samsung's remaining 8-inch lines, S6 and S8, hovered near 70% before the closure. Rising operating costs and thin processing margins made older planar equipment uneconomical against state-backed competitors in China. Chinese rivals led by Semiconductor Manufacturing International Corp. (SMIC) and Hua Hong Semiconductor have flooded the merchant foundry market with low-cost capacity. Both companies have expanded legacy output using domestic subsidies and depreciated tooling. SMIC and Hua Hong maintained 8-inch fab utilization rates between 85% and 90% throughout mid-2026. Chinese foundries absorbed automotive power management integrated circuit (PMIC) and display driver integrated circuit (DDI) contracts abandoned by Korean manufacturers. Nexchip Semiconductor, China's third-largest contract chipmaker, implemented a 10% price increase in June 2026. The price increase reflected tightening availability for commodity silicon after tier-one manufacturers curtailed fabrication lines. Samsung Foundry Business Division President Han Jin-man informed staff in an internal presentation that 8-inch contract manufacturing has become structurally unprofitable. Han told employees the division has pushed its operating profit target back to 2028. Samsung initially projected its contract chip business would achieve sustainable operating profitability by 2026. The two-year delay underscores severe price erosion across planar nodes spanning 65 nanometers to 180 nanometers. South Korean specialty foundry DB HiTek has absorbed some local spillover orders. DB HiTek operates its 8-inch fabrication facilities at near 100% utilization, focusing on specialized analog circuits and discrete power devices. Samsung is shifting cleanroom floor space and capital expenditures toward 300-millimeter, 12-inch wafer infrastructure. The company manufactures its high-margin image sensors and mobile processors exclusively on 12-inch lines. The migration allows Samsung to allocate engineering staff and capital directly to advanced node development. The company is struggling to win mass-production volume for its 2-nanometer and 3-nanometer gate-all-around processes against TSMC. TSMC has already notified foundry customers that it will decommission its 6-inch Fab 2 and 8-inch Fab 5 facilities by late 2027. The coordinated exit of both foundry giants cements Chinese dominance in mature commercial silicon. The reorganization leaves fabless chip design firms with narrowing supplier choices for basic analog chips. Device designers face either higher unit costs at remaining Taiwanese fabs or rising geopolitical exposure by transferring tooling masks to Chinese lines. Samsung has not published regulatory filings detailing the exact conversion timetable for the Giheung S7 cleanrooms or capital allocations for remaining legacy tools. The company's Foundry Business Division scheduled its next customer strategy review for early November 2026. ## Primary sources 1. fss.or.kr 2. startupfortune.com 3. ngetnews.com 4. koreaherald.com 5. thelec.net --- Cite as: East Asia Brief, "Samsung trims legacy chip lines as Chinese foundries expand," October 25, 2026. https://eastasiabrief.com/semiconductors/samsung-trims-legacy-chip-lines-chinese-foundries-expand-923