Mysterious company spends $16.5 billion to buy chips from Samsung Electronics

According to Yonhap News Agency, South Korea's leading technology group Samsung Electronics Co. said on July 28 that it had successfully signed a record semiconductor supply contract worth 22.8 trillion won (equivalent to 16.5 billion USD) with a major secret customer.

According to a filing with the regulator, Samsung Electronics confirmed that the chip manufacturing contract will be completed by December 31, 2033.

With a value equivalent to 7.6% of total revenue of 300.9 trillion won in 2024, this is the largest chip order contract Samsung Electronics has ever won.

The deal is expected to give a big boost to the semiconductor manufacturing sector - a field where Samsung has long faced many challenges in its efforts to narrow the gap with its current global leader Taiwan Semiconductor Manufacturing Company (TSMC).

Samsung has not yet disclosed the identity of the partner or specific details of the agreement, citing administrative confidentiality.

According to a preliminary earnings report released earlier this month, Samsung Electronics is estimated to have posted an operating profit of 4.59 trillion won and revenue of 74 trillion won in the second quarter of this year.

However, the company's operating profit fell short of market expectations, mainly due to poor performance in its two semiconductor manufacturing and system semiconductor design (System LSI) segments.

Immediately after the announcement of the record contract, Samsung Electronics shares rose 2.43% to 67,500 won as of 9:37 a.m. (local time), outperforming the 0.26% decline of the KOSPI index on the South Korean stock market.