February 26, 2018

Samsung's Pyeongtaek chip complex starts production

05 July 2017, 12:28 | Frank Carlson

Samsung Electronics headquarters in Seoul

Samsung Electronics headquarters in Seoul

Samsung will invest at least $18.6 billion to expand and upgrade its chip plants in the South Korean cities, Pyeongtaek and Hwaseong by 2021.

Samsung said by 2021, it will spend an additional US$12.5 billion to increase the capacity in its memory chip factory in Pyeongtaek, south of Seoul, which began operating in the day. Vertical NAND (V-NAND) chips refer to chips with multiple layers of memory cells stacked vertically in a three-dimensional structure.

This year is expected to result in record profits for memory chip makers as prices have gone up due to increased demand from smartphones and servers producers, as well as a persistent supply shortage of NAND chips. However, the production capacity or size of the facility were not disclosed, as they are trade secrets.

As global chipmakers shift their focus to higher capacity V-NAND chips, Samsung announced goals last month to shift half of its NAND chip production to the fourth generation 64-layer chip. Samsung's first semiconductor fabrication line in Xi'an was constructed in 2014 and is presently in full operation. The new chips are core components for data centers, big data analysis and artificial intelligence. The division of the company for the production of semiconductors accounts for the largest share of its profits. In the proposed 37 trillion won, Samsung vowed a 30 trillion won investment for expanding semiconductor facilities. A further 6 trillion won ($5 billion) is being committed to boosting production at Hwaseong.

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South Korea's economy could also benefit if Samsung Displays builds a new OLED manufacturing site in Asan by 2018. Extreme ultra violet equipment can cut the cost of the overall chip fabrication process. This spat has delayed adding an extra fabrication unit to a Japanese plant run by the two firms, keeping Toshiba from meeting frothing demand as global competitors ramp up production.

As smartphones have become increasingly powerful, demand for suitable memory chips has soared.

The latest move reportedly comes as a response to repeated calls to big corporations from the South Korean government to invest domestically as part of a job-creation plan.

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