Samsung Speeds Up First P5 Mass Production Line, Pulls Equipment Installation Forward to Q2 Next Year Samsung Electronics is moving faster to build the first mass production line (Ph1) at Pyeongtaek Campus 5 (P5). It was learned on the 28th that Samsung is discussing with major equipment suppliers a plan to pull the target for moving equipment into Ph1 forward from the third quarter of next year to the second quarter. The move is seen as reflecting Samsung's intent to secure capacity quickly as demand for high value DRAM and NAND for AI surges. P5 is Samsung's next generation chip production base, targeted to begin operations in 2028. Construction of the Ph1 cleanroom began in the third quarter of this year. A cleanroom is the infrastructure that controls fine particle contamination, temperature, and humidity inside a fab. Samsung originally planned to build the P5 Ph1 cleanroom early next year but pulled that schedule forward by about six months. Equipment installation for Ph1 was then set for around the third quarter of next year. Recently, however, Samsung's P5 capex has picked up even more. "Samsung has told us it will start moving equipment into P5 Ph1 around May or June next year instead of July or August as originally planned," one industry source said. "The schedule already changed once when the cleanroom was built early, and now investment is moving even faster." Another source said, "Samsung is going so far as to ask for equipment to be delivered even in the first quarter of next year, saying it will store the tools somewhere else. Its commitment to investing early in P5 is very strong." Discussions on P5 Ph2 investment are also taking shape. Ph1 is currently likely to be built as a DRAM and high bandwidth memory (HBM) line, and Ph2 as a leading edge NAND line, including 10th generation (V10) NAND. "No formal purchase order (PO) has been issued yet, but Samsung is discussing plans with suppliers to build P5 Ph2 as a NAND line," said an equipment industry source. "Equipment lead times, the time from order to delivery, are very long right now, so Samsung is asking suppliers to secure related components in advance." The main reason Samsung is moving up its capex timeline is the memory chip shortage. Global Big Tech companies are increasing orders for the high performance DRAM and NAND needed to build AI infrastructure, but memory makers including Samsung cannot meet all of that demand because of capacity limits. On its second quarter earnings call in July, Samsung said, "Based on the demand we have received, demand that goes unmet this year is being pushed into next year, adding further supply pressure." It added, "We expect next year's supply shortage to be more severe than this year's, and the shortage to continue into 2028."

Samsung Securities: Key Terafab Beneficiaries Terafab initially plans to leverage Intel's 14A process technology and supply chain, as a result, these global and domestic equipment vendors are positioned as key early beneficiaries. $ASML $AMAT $LRCX $KLAC $INTC $SPCX

#Samsung’s# HBM4 Yield Reportedly Reaches 80%: Competition Is Shifting From “Technology Catch-Up” to Volume Expansion South Korea’s Seoul Economic Daily reported on September 20, citing industry sources, that Samsung Electronics’ HBM4 yield has improved from below 60% during the initial mass-production stage to approximately 80%. Samsung is now reportedly planning to increase its overall HBM monthly wafer input from around 180,000 wafers in 2026 to approximately 250,000 wafers in 2027, representing an increase of nearly 40%. The key shift is clear: the HBM4 race is moving beyond technology qualification and yield improvement toward large-scale capacity expansion and customer allocation.

Samsung Securities: Hyperscaler Compute Business Models Hyperscalers operate through two primary methods: 1) Computing rental and 2) Model inference services, both of which can achieve a Gross Profit Margin (GPM) of 68% to 81%. > Model Inference Advantages: Model inference services feature a large revenue base and high margins, which is why Meta focuses on deploying its capacity toward in-house services rather than plain rentals. > Value of Compute Scarcity: As seen in examples like SpaceX, simple rental services based on compute scarcity can achieve revenue and margin levels comparable to model inference services. > Widening Gap: The flexibility and profitability gap between operators capable of deploying and servicing massive compute infrastructure versus those that cannot is expected to widen further. Chart Breakdown > Compute Rental Service GPM (Left Chart): Shows $21.7B in revenue, $6.9B in cost of goods sold (COGS), resulting in $14.8B in gross profit, yielding a 68% GPM. > Open-Weight Model Inference Service GPM (Middle Chart): Shows $36.6B in revenue, $6.9B in COGS, resulting in $29.7B in gross profit, yielding an 81% GPM. > Hyperscaler GPM Comparison by Compute Business (Right Chart): Compares compute rental (GPM 68%, $14.8B gross profit), model inference with 35% training (GPM 71%, $16.9B gross profit), and model inference with 0% training (GPM 81%, $29.7B gross profit). $GOOGL $AMZN $META $MSFT $SPCX $ORCL $NBIS

Samsung Securities: Hyperscalers to have a temporary FCF deficit period spanning from 2Q26 to 3Q28, followed by a dramatic expansion in FCF from 2029 through 2030. > CapEx Growth as a Rational Investment for RPO: The increase in capital expenditure is driven by rapid growth in Remaining Performance Obligations (RPO)—long-term signed contracts—requiring front-loaded CapEx to fulfill future revenue. > Strong Future Visibility: For instance, Amazon highlighted that a substantial portion of its additional capacity for 2027 is already contracted, with considerable portions of 2028 capacity also pre-booked. > Break-Even and Payoff Timeline: Server and network investment break-even occurs in under 3 years on average, allowing for meaningful FCF generation for the subsequent 2 to 3 years. $META $AMZN $DELL $NVDA $MSFT $ORCL $GOOGL

Samsung’s first 2nm fab in Taylor is reportedly fully booked by Tesla $TSLA, Arm $ARM and Broadcom $AVGO before operations have commenced, with trial production expected this month or next and mass production in 2027. $TSM $INTC