Latest news with #SamsungBiologics
Korea Herald
3 days ago
- Business
- Korea Herald
Spinoff or stay? Samsung's foundry dilemma back in spotlight
Experts say spinning off lackluster foundry could boost trust, competitiveness, but Samsung says it's too early Samsung Electronics is again facing speculations that it may spin off its foundry business from the broader semiconductor division, amid concerns over the same conflicts of interest that drove Samsung Biologics to split its biosimilar business and contract drug manufacturing. Last week, Samsung Biologics, the biotech arm of Samsung Group, announced it will spin off its biosimilar subsidiary Samsung Bioepis into an independent entity. Once the deal is completed, Samsung Biologics will only retain its contract development and manufacturing organization, a strategic move aimed to address growing customer and investor concerns about potential conflicts of interest in its competing business lines. A similar conflict of interest conundrum has long weighed on Samsung Electronics' Device Solution division, which houses three distinct yet interconnected semiconductor operations under one roof: memory chips, foundry and System LSI. While the foundry manufactures chips for fabless companies, System LSI is responsible for designing logic chips, including Samsung's own Exynos. This dual role as both a chip designer and a manufacturer has raised concerns over possible technology leakage and inherent conflicts of interest for years. 'Trust is critical in the foundry business," said an industry source who requested anonymity. "For fabless companies like Nvidia and Qualcomm that don't manufacture their own chips and rely on foundries, there's always concern that sensitive design data could be exposed to competitors. Spinning off the foundry business would reduce these risks and make Samsung more competitive." Growing calls for spinoff Many market analysts have been calling on Samsung to carve out its foundry unit, arguing that organizational independence would help the company respond quickly to clients' demands and scale faster to keep up with technological advancement. Even the conglomerate's financial subsidiary Samsung Securities, recommended that Samsung spin off the foundry and list on the US market in a 2022 report. The broader semiconductor industry is also moving away from integrated device manufacturer models like Samsung -- where a single company handles both chip design and manufacturing -- toward a more specialized structure such as a fabless-foundry partnership. A fellow IDM Intel is also reportedly exploring a similar path, considering spinning off its foundry unit, potentially as a joint venture with TSMC. Another factor driving the spinoff discussion is financial. Analysts say Samsung's underperforming foundry unit is dragging down Samsung Electronics' bottom line. In the first quarter of 2025, Samsung's DS division reported revenue of 25.1 trillion won ($18.17 billion) and an operating profit of 1.1 trillion won, down 42 percent on-year and marked the third consecutive quarter of decline. This figure falls far short of the 7 trillion won profit posted by smaller chipmaking rival SK hynix posted during the same period. While Samsung does not disclose performance by specific business unit, industry sources estimated that memory chip operations posted around 3 trillion won in operating profit, which was offset by 2 trillion won losses in System LSI and foundry. This sluggish performance of its non-memory chip units strengthens the argument for a spinoff, yet paradoxically, this same weakness makes near-term divestiture less feasible. Too early to split? 'In principle, Samsung's spinoff would be ideal, similar to TSMC, whose specialization in foundry services has earned trust from customers,' said Lee Jong-hwan, a system semiconductor engineering professor at Sangmyung University. 'But right now, Samsung foundry remains in the red, and splitting off under these conditions would be meaningless. The company must first return to profitability and then consider a spinoff when it's ready. It's too early for now." Given the capital-intensive nature of the foundry business, any separation would require a stable revenue stream and securing major clients, both of which Samsung currently lacks, observers say. If Samsung were to spin off its foundry unit, it would lose key advantages of operating under the umbrella of Samsung Electronics. Despite continued losses, the foundry has managed to stay afloat and conduct large-scale investments, largely due to the tech giant's strong earnings from its memory and consumer electronics businesses, including smartphones. Amid growing speculation, Samsung is not considering a spinoff of its foundry unit at this time, according to a source familiar with the matter. Even Samsung Electronics Chair Lee Jae-yong appears reluctant on the idea. 'We are hungry to grow the business. Not interested in spinning (them) off,' Lee told Reuters last October in the Philippines, when asked whether the tech giant is considering spinning off the foundry. Professor Lee noted that Samsung envisions becoming a successful IDM capable of excelling in both memory and non-memory. In an era where AI chips are reshaping the semiconductor industry, Samsung could gain a competitive edge if it can develop and produce AI critical high-bandwidth memory chips entirely in-house. "Samsung first needs approval from Nvidia for its HBM chips to become a trusted AI chip supplier," said Professor Lee. "If that happens everything changes. But until then, the priority is profitability. Only after that can a spinoff or any kind of restructuring make strategic sense."
Korea Herald
6 days ago
- Business
- Korea Herald
Samsung Biologics hits W3tr in cumulative orders this year
Samsung Biologics, the biotech arm of Samsung Group, reported Monday that it has surpassed 3 trillion won ($2.2 billion) in cumulative contract orders for 2025, just five months into the year, following a series of major deals with global pharmaceutical firms. According to a regulatory filing, the company recently signed two new contract manufacturing organization, or CMO, deals totaling 440.5 billion won with pharmaceutical companies based in Europe and Asia. These contracts run through December 2030 and December 2033, respectively. Due to non-disclosure agreements, client names and product details were not disclosed. So far in 2025, Samsung Biologics has signed four CMO deals across the US, Europe and Asia. This achievement represents over 60 percent of its total contract value for 2024, reinforcing the company's global competitiveness. The company now counts 17 of the world's top 20 pharmaceutical companies as clients and has accumulated total orders of approximately $18.2 billion since its founding. With the recent launch of its fifth plant in April, adding 180,000 liters of capacity, Samsung Biologics has expanded its total capacity to 784,000 liters, the largest in the world. Samsung Biologics also maintains strong performance in quality control, recording a 99 percent batch success rate last year and securing 356 manufacturing approvals from global regulators as of April 2025. To expand its global presence, the company has actively participated in major industry events including JPMorgan Healthcare Conference, DCAT Week 2025 and PEGS Boston. Samsung Biologics will next join the BIO International Convention held in Boston this June to further strengthen its global partnerships.
Hans India
22-05-2025
- Business
- Hans India
Samsung Biologics plans to separate CDMO, biosimilar biz
Seoul: Samsung Biologics, a biotech arm of South Korea's Samsung Group, said on Thursday it plans to spin off its biosimilar development business to streamline its operations and focus on its core contract development and manufacturing organisation (CDMO) services. According to a regulatory filing, the company will establish a new entity, Samsung Epis Holdings, which will later incorporate Samsung Bioepis Co., a biosimilar drug developer, as a wholly owned subsidiary, reports Yonhap news agency. The spinoff process will proceed with the submission of a securities report on July 29, followed by a shareholders meeting on Sept. 16 for final approval. Samsung Biologics explained that the split will allow the company to concentrate resources on its CDMO business, which operates under a different revenue model compared to biosimilars. CDMO refers to a company that handles not only the outsourced manufacturing of drug substances but also all of the innovation and development work that occurs prior to production. In particular, the company acknowledged that some customers have raised concerns over the possibility that proprietary technologies for original drugs might be shared with Samsung Bioepis, which operates in the biosimilar space. "As Samsung Bioepis has been expanding its biosimilar business, the concerns of Samsung Biologics' customers have gradually increased, which has had some impact on the competitiveness of our orders," said Ryu Seung-ho, chief financial officer at Samsung Biologics, during an online briefing. "After the separation, we expect our customers' concerns about conflicts of interest will be better addressed." Samsung Biologics originally established Samsung Bioepis as a joint venture with U.S. pharmaceutical company Biogen Inc. in 2012. It acquired Biogen's stake for US$2.3 billion in 2022, making Bioepis a wholly-owned subsidiary. Ryu also emphasized that the spinoff is not part of any broader corporate governance restructuring within Samsung Group. In a separate statement, Samsung Bioepis said the spinoff will not impact its day-to-day operations. "Samsung Bioepis' ongoing business operations, including research and development, manufacturing, supply distribution and commercialization of biologic medicines, will not be affected by the spinoff," the company said. "We will continue to focus on our core business, and we remain committed to ensuring the continued development, manufacturing and distribution of high-quality biosimilar medicines to patients around the world without any disruption." By separating the two businesses, Samsung Biologics said it aims to reinforce the independence of both entities, allowing each to sharpen its strategic focus. The company said this will enhance competitiveness, operational efficiency and long-term value for shareholders. Samsung Biologics is one of the world's leading CDMO firms, reporting 4.54 trillion won ($3.3 billion) in sales and 1 trillion won in net profit in 2024.
Korea Herald
22-05-2025
- Business
- Korea Herald
Samsung Biologics splits biosimilar business to boost CDMO, investment flexibility
Spin-off aims to sharpen operational focus, build client trust, enhance shareholder value Samsung Biologics, the biotech arm of Samsung Group, announced Thursday that it will spin off its biosimilar operations into a new holding company, separating them from its contract development and manufacturing organization business to sharpen the strategic focus of each unit. Through the structural realignment, Samsung Biologics will concentrate solely on its CDMO business, while the newly created holding company, tentatively called Samsung Epis Holdings, will oversee the biosimilar unit Samsung Bioepis. Kim Kyung-ah, CEO of Samsung Bioepis, will concurrently serve as CEO of the new holding company. Samsung Bioepis was established in 2012 as a joint venture between Samsung Biologics and US-based Biogen, with Samsung initially holding an 85 percent stake. In 2022, Samsung Biologics acquired Biogen's remaining shares for $2.3 billion. 'This split reflects our decision to enhance competitiveness by responding swiftly to global changes and sharpening strategic focus,' said Samsung Biologics CEO John Rim. 'Both entities will accelerate their growth and are well-positioned to establish themselves as global leaders in biopharma.' Samsung Biologics clarified that the creation of Samsung Epis Holdings through the spin-off bears no relation to the governance structure of Samsung Group. The separation also aims to address concerns from CDMO clients regarding the in-house biosimilar unit. The dual-track model had raised conflict-of-interest concerns, particularly related to potential technology leakage. 'We've invested significant time and resources to ease these concerns, yet it's realistically difficult to eliminate all worries across our client base,' said Ryu Seung-ho, executive vice president of Samsung Biologics, at a press conference on Thursday. 'This restructuring will further allow each business to be properly valued in the market and give shareholders more flexibility to invest based on their own strategies," he added. Under the deal, shareholders will receive shares in both companies based on current book values — approximately 0.65 shares in Samsung Biologics and 0.35 shares in Samsung Epis Holdings for each share held. With the restructuring expected to fuel focused growth, both entities have outlined distinct long-term goals. Samsung Biologics will double down on its ambition to become a global top-tier CDMO by investing in three key areas: expanding production capacity, diversifying its service portfolio, and widening its international footprint. New initiatives will target next-generation biomanufacturing technologies, including antibody-drug conjugates or ADCs, adeno-associated viruses or AAVs, and pre-filled syringes. Samsung Epis Holdings will focus on expanding Samsung Bioepis's biosimilar portfolio to over 20 products, while also developing platform technologies and exploring investment opportunities in emerging technologies and global markets. 'Samsung Epis Holdings plans to establish new subsidiaries in addition to managing the existing Samsung Bioepis,' said Kim Hyoung-joon, vice president of Samsung Bioepis, at the press conference. 'These new entities will focus on developing platform technologies for future growth. We also aim to generate revenue through investments in domestic and global companies,' he added. Regarding the upcoming procedures, the company will submit a registration statement on July 29, followed by a shareholder meeting for approval on Sept. 16. Upon completion of the spin-off, effective Oct. 1, Samsung Epis Holdings will make Samsung Bioepis its wholly owned subsidiary. Both Samsung Biologics and Samsung Epis Holdings are scheduled to be relisted on Oct. 29. Trading of Samsung Biologics shares will be temporarily suspended from Sept. 29 through Oct. 28.
Bloomberg
22-05-2025
- Business
- Bloomberg
Samsung Biologics to Split Into Bio CDMO and Holding Company
Samsung Biologics Co. said it plans to carve its business into a contract drug manufacturer and a holding firm which will manage its subsidiaries through a spin-off. The new holding company, tentatively named Samsung Episholdings Co., will directly manage units including Samsung Bioepis Co., the South Korean contract drug maker said in a Thursday regulatory filing.
