INFRA
INFRA
INFRA
Samsung to invest $18.6B into expanding memory production
As global demand for flash memory continues to rise, the semiconductor industry is ramping up production to meet it.
One of the manufacturers leading the charge is Samsung Electronics Co. Ltd, which yesterday revealed plans to invest 20.4 trillion won ($17.7 billion) into expanding its chip business. The lion’s share, 14.4 trillion won ($14.7 billion), will be used to upgrade a newly opened flash fabrication plant (pictured) in the South Korean city of Pyeongtaek. The complex has already cost Samsung 15.6 trillion won ($13.5 billion) so far.
Reports from 2015, when construction on the site began, indicated that the company expects the plant to eventually generate annual revenues of $40 billion. There was no word on whether the forecast is based on the original 15.6 trillion-won plan or also takes into account the follow-up investment, which was expected by South Korean media. Either way, the project is set to significantly strengthen the company’s position in the semiconductor market.
The remaining 6 trillion won ($5.2 billion) allocated as part of today’s initiative will serve the same purpose. Samsung intends to spend the capital on expanding a flash memory chip plant in Hwaseong, which is about 21 miles from Pyeongtaek.
Samsung expects the plan to create a total of 440,000 new jobs in South Korea by 2021. That’s on top of an upcoming workforce expansion at a memory plant in the Chinese city of Xi’an, which is likewise set to receive a fresh capital infusion as part of the company’s growth effort. Topping it all off is a 1 trillion-won ($866 million) investment that Samsung’s display division intends to make into a new organic light-emitting diode factory in its home country.
The timing of the company’s announcements is significant for several reasons. Not only is demand for hardware components – and memory in particular – growing at a rapid pace, but it has reached a point where the industry is experiencing persistent supply shortages. As a result, NAND flash prices will jump by up to 53 percent this year, according to a report from research firm IC Insights cited by The Guardian.
With a 40 percent share of the memory market, Samsung is one of the suppliers benefiting the most. The company recently saw profits jump 50 percent to a three-year high thanks to the strong performance of its chip business.
Image: Samsung
Since you’re here …
… We’d like to tell you about our mission and how you can help us fulfill it. SiliconANGLE Media Inc.’s business model is based on the intrinsic value of the content, not advertising. Unlike many online publications, we don’t have a paywall or run banner advertising, because we want to keep our journalism open, without influence or the need to chase traffic.The journalism, reporting and commentary on SiliconANGLE — along with live, unscripted video from our Silicon Valley studio and globe-trotting video teams at theCUBE — take a lot of hard work, time and money. Keeping the quality high requires the support of sponsors who are aligned with our vision of ad-free journalism content.
If you like the reporting, video interviews and other ad-free content here, please take a moment to check out a sample of the video content supported by our sponsors, tweet your support, and keep coming back to SiliconANGLE.
