Samsung to spend $74 bn on chip production lines in Korea

Samsung Electronics Co., the world’s top memory chipmaker, is expected to invest some $74 billion to expand semiconductor production capacity in South Korea to meet growing global demand in the long term.

Samsung was known to have notified the local government of a plan to operate six production lines at its Pyeongtaek complex, the world’s largest semiconductor plant, according to industry sources on Tuesday.

The South Korean tech giant has recently started basic construction on the fourth facility in the complex located some 70 kilometers south of Seoul with a schedule to complete the third one in the second half, the sources said. The company could spend about 100 trillion won ($74.3 billion) to add three new production lines as it usually costs some 30 trillion won to build one.

The investment comes on the heels of Samsung Vice Chairman Jay Y. Lee unveiling a goal to become the world’s top system semiconductor maker by 2030.

“Samsung is predicted to expand production facilities as the global semiconductor market will gradually grow in the mid to long term, despite chip demand being hit by a slowdown in the electronics and IT sectors this year,” said an industry source.

TO PRODUCE 14 NM DRAM CHIPS, SYSTEM SEMICONDUCTORS

Last week, Samsung announced plans to spend 20 trillion won by 2028 on an advanced semiconductor research and development complex to secure a competitive edge in an intensifying battle against rivals such as Taiwan Semiconductor Manufacturing Co. (TSMC).

In the Pyeongtaek complex, Samsung is set to manufacture the industry’s smallest 14-nanometer DRAM chips using extreme ultraviolet (EUV) technology, and system semiconductors with 5 nm or smaller-size process nodes. All the production processes will be automated by smart control systems.

The company, however, plans to increase manpower for the semiconductor business. The number of employees for the sector rose to 63,902 last year from 52,095 in 2018, and that figure is expected to exceed 70,000 by the end of this year.

Samsung spent 43.6 trillion won on chip facilities last year, nearly double the 23.7 trillion won in 2018. The company is expected to continue to raise investment in the semiconductor business, although it has yet to unveil detailed spending plans.

Write to Shin-Young Park at nyusos@hankyung.com
Jongwoo Cheon edited this article.