Samsung plans $18.6 b capex to widen chip lead

Signage is seen at the Samsung 837 store in the Meatpacking District of Manhattan New York

Signage is seen at the Samsung 837 store in the Meatpacking District of Manhattan New York

South Korea's largest chipmaker Samsung Electronics Co. said on Tuesday that its new-generation fabrication line at Pyeongtaek, Gyeonggi Province, is fully ready to roll out cutting-edge three-dimensional vertical non-volatile storage (V-NAND) flash memory chips. Based on The Bank of Korea's input-output table, production inducement effect and direct and indirect employment inducement effect will be $141 billion (163 trillion KRW) and 440,000 people respectively if Samsung were to invest $32.1 billion (37 trillion KRW). Tech firms have been increasing their data centers and servers in order to increase data from mobile devices and motor vehicles as well as expectations that increased dependence on artificial intelligence means would mean more demand for data handling operations.

Samsung may expand its semiconductor manufacturing capacity in Xi'an, China, by adding a second fab there. The higher the number of layers, the more the data can be stored at a faster data processing speed. However, the shortages are expected to remain through this year, as new production lines reportedly won't make meaningful supply contributions until 2018.

Samsung has been fabbing two new manufacturing plants for chips.

The investment includes 14.4tn won by 2021 on Samsung's new NAND factory in Pyenogtaek and an additional 6tn won in a new semiconductor production line in Hwaseong, reports Reuters. It will invest 6 trillion won in a new semiconductor production line in Hwaseong, but did not elaborate on timing or product.

Samsung on Tuesday also said unit Samsung Display plans to invest around 1 trillion won on a new organic light-emitting diode display complex in South Korea. The factory's production capacity is equivalent to around 200,000 300mm wafers per month, but Samsung's additional investments likely will almost double that figure by 2021.

Samsung said that it aims to secure competitiveness in the components sector by promoting large investments in its semiconductor and display production lines while at the same time contribute to creating jobs in the country and developing overall IT industry. The first Xi'an plant is now producing NAND chips.

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