TradingKey - On July 20, Eastern Time, Samsung Electronics is experiencing a rare business divergence, with chip profits surging while its consumer electronics division slips into losses.
According to the Star Market Daily, Samsung Electronics' foundry business is evaluating doubling the initial production scale of its Taylor plant in Texas, US, compared to the original plan. The Taylor plant is one of Samsung's largest semiconductor investment projects in the US. Originally scheduled to begin production in the second half of 2024, it has undergone multiple delays, and some areas are currently in the equipment installation phase.
According to sources, the evaluation of the expansion is mainly due to already secured customer orders. In July 2025, Samsung and Tesla ( TSLA) signed a $16.5 billion foundry agreement, with the contract valid until December 31, 2033. Musk said at the time that the strategic position of Samsung's Taylor plant in Texas is very important. The latest supply chain news indicates that the plant will use advanced 2nm process technology to jointly undertake the production tasks for Tesla's AI5 chip and next-generation AI6 chip.
Samsung completed the tape-out of Tesla's AI5 chip using the 2nm process in July this year, and will next prepare for mass production at the Taylor plant. The Taylor plant is expected to complete its first batch of wafer tape-outs by the end of 2026, with full production likely starting in early 2027.
Samsung has not yet released an official announcement regarding the expansion evaluation of the Taylor plant, and the specific expansion scale and timeline are still subject to official confirmation.
In contrast to the expansion of its chip business, Samsung's consumer electronics division in the US is undergoing a major contraction. According to Reuters, Samsung Electronics America (SEA) has cut a total of more than 800 positions in New Jersey and Texas, a move directly related to the plan to relocate SEA's headquarters from New Jersey to Texas.
Documents obtained by Reuters show that SEA notified some employees on June 30, announcing the launch of "company-wide layoffs." A total of 739 positions in Englewood Cliffs, New Jersey, were affected by the headquarters relocation; most of these employees received relocation offers, but some have been laid off. Another approximately 100 employees at the Plano, Texas office were laid off, involving the mobile business division.
The layoffs come as Samsung's mobile business division faces its first-ever loss in history. Samsung Securities forecasts that the mobile and network business division will record an operating loss of 5.84 trillion won (approximately nearly $4 billion) in 2026, marking its first-ever annual loss. In the smartphone market, Samsung has consistently been pressured by Apple ( AAPL ), while facing challenges from Chinese rivals like TCL and Hisense in the television and home appliance sectors. The AI boom has driven up memory chip prices, which is further eroding the profit margins of consumer electronics.
As of the end of 2025, Samsung Electronics had a total of 11,770 employees in the US, including chip business personnel. Samsung stated that there are currently no plans for a large-scale global restructuring of its consumer products business, and that the relocation of SEA's headquarters is intended to "promote closer collaboration, integrate more teams into a growing tech and AI ecosystem, and optimize organizational structure."
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