Samsung opens world’s largest chip plant
Tech titan to invest 37 trillion won (US$32 billion) on chip, display by 2021
By Lee Min-hyung
Samsung Electronics opened the world’s largest semiconductor plant in Pyeongtaek, Gyeonggi Province, Tuesday, seeking to meet surging demand for state-of-the-art 3D NAND flash chips.
The new chip factory will help the Seoul-based tech giant tighten its grip on the global memory chip market. The Pyeongtaek plant, mass-producing 64-layer V-NAND flashes, is 2.89 square kilometres in area, or about 400 football fields.
Samsung started work on the factory in 2015 to cement its leadership in the data-driven tech industry. Demand for memory chips with higher storage continues to grow for data centres and other emerging technologies — including big data, artificial intelligence and vehicles, the company said.
Samsung also unveiled its plan to invest 37 trillion won (US$32.14 billion) in expanding manufacturing facilities for chips and display panels by 2021.
In a breakdown, the company plans to invest 30 trillion won expanding the Pyeongtaek plant’s production capacity. It will also allocate 6 trillion won (5.23 billion) to build cutting-edge infrastructure for its semiconductor factory in Hwasung, Gyeonggi Province.
The rest will be used for its display panel-making affiliate Samsung Display, which is set to establish additional facilities to make organic light-emitting-diode (OLED) panels in Asan, South Chungcheong Province.
The move comes as the memory chip industry experiences an unprecedented boom. With demand for DRAM and NAND chips surpassing supply, their price has risen steeply.
This allowed Samsung’s device solution (DS) unit, which manufactures chips and display panels, to post a record operating profit of 7.59 trillion won (6.61 billion) in the first quarter this year.
Besides the local plants, Samsung also said it thinking about establishing additional chip production lines in Xian, China. The company opened the plant in 2014, in a bid to meet NAND flash demand from the world’s largest economic powerhouse.
“Our massive investment drive will generate the production inducement of 163 trillion won on the economy and create jobs for 440,000 people by 2021,” a company official said.
A group of 100 high-ranking Samsung executives and employees participated in the opening ceremony of the Pyeongtaek factory. They included Samsung Electronics Vice Chairman Kwon Oh-hyun and its DS unit chief Kim Ki-nam.
“The Pyeongtaek chip complex is our new challenge to lead the semiconductor industry,” Kwon said.
Samsung has three major chip-manufacturing complexes in Gyeonggi Province, including Hwasung, Giheung and Pyeongtaek. The company expects the chip cluster to stand at the forefront of innovation in the global equipment and materials industry.
According to Nomura Securities, Samsung Electronics will generate estimated chip sales of US$15.1 billion during the April-June period. This, if realized, will dethrone Intel from its decade-long top spot in the global chip industry.
The rosy outlook will also allow the company to report a record operating profit of 13.4 trillion won (US$11.67 billion) in the second quarter, beating Intel and Apple for the first time, according to KB Securities.