According to the industry on the 1st, the operating rate of the production lines P2 and P3 at Samsung's Pyeongtaek campus, which was below 50% last year, has reportedly reached its highest level recently. These production lines are responsible for legacy processes including 4nm (nanometer, one billionth of a meter), 5nm, and 7nm.
50% utilization for an advanced production process (even older semiconductor nodes requires massive investments) is extremely bad.
It is analyzed that the profitability of products produced for Baidu, a major customer of Samsung Electronics' 4nm process, was impacted due to the effects of U.S. sanctions. Samsung Electronics was mass-producing Baidu's artificial intelligence (AI) chips using the 4nm process. In the earnings announcement conference call, Samsung Electronics stated, "A provision was generated due to the impact of the public sanctions on AI chips."
A clue the possible source of profitability decline for Samsung's fab business.