Samsung’s System LSI division just delivered its best-ever first-quarter revenue. Sounds like great news, right? But there’s a catch – the company still expects to end the full year with losses in this part of its chip business.

President Park Yong-in recently talked about the challenges. He said Samsung needs bigger structural changes because demand is soft in several key areas. Even with strong memory (HBM) chip sales, thanks to AI demand, the non-memory side (foundry and System LSI) continues to struggle.

“We achieved the highest level of sales in the first quarter of this year” Park said at the briefing. Park said, “The System-on-Chip (SoC) business is difficult to convert into a surplus in the short term, but we will strive to improve the business body and improve profitability.” “We will create an environment where structural problems can be solved by management and members can focus on technology.”

The one chance? Development of the next flagship Exynos 2700 processor is moving along steadily. Samsung is expected to use it in the next Galaxy S-series phones.

Samsung is clearly treating its foundry business (making chips for other companies) and System LSI (mobile processors and more) as key parts for the entire company.

What’s the real issue? The mobile SoC market is super competitive, and AI demand has not helped every segment the same way. While memory chips are printing money, fixing the logic and foundry side will take serious time and effort.

For long-term success, Samsung is trying to balance its memory and non-memory chip businesses. Investors are watching closely to see if these changes start delivering real results soon.

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