Samsung mulls another chip plant in Pyeongtaek

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Samsung mulls another chip plant in Pyeongtaek

Riding on the wave of the latest semiconductor supercycle, Samsung Electronics is considering building a second factory next to the one already at its site in Pyeongtaek, Gyeonggi, according to the world’s top chipmaker on Wednesday.

“We are in the middle of discussing another semiconductor factory,” said a Samsung spokesman, who declined to offer further details, citing the confidentiality of the matter.

The world’s No. 1 chipmaker is reportedly spending some 30 trillion won ($27.6 billion) to add another facility to churn out memory chips, the specifics of which remain unknown. It is highly likely the company will choose between DRAM and NAND and make a final decision based on demand at the time of the facility’s completion, which is expected to be sometime in the first half of next year.

The investment plan is the first of its kind since the business empire’s vice chairman and de facto leader, Lee Jae-yong, who was convicted of bribery and other charges, was released from his year-long police custody on Monday after the appeals court reduced his five-year prison term to four years of probation. Keen attention is gathering around Samsung’s future plans, including new investments, mergers and acquisition deals and research and development projects.

Although the Samsung spokesman declined to confirm the matter, the tech bellwether’s top executives met Wednesday morning and “agreed on a preliminary plan to embark on the construction of the new factory,” Yonhap news agency reported, citing an unnamed executive. The corporate management committee consisted of CEOs from Samsung’s three business divisions. What was discussed at the meeting does not require regulatory filing.

Samsung launched the operation of the first Pyeongtaek plant in July of last year. It is the biggest in the world and is mainly devoted to first-generation 64-layer V-NANDs. The 30 trillion won that was assumed to be injected into the second facility is based on the amount that was allocated to the first plant.

“Samsung’s decision to add a memory chip facility is evidence that the semiconductor supercycle will continue,” said Kim Kyung-min, an analyst at Daishin Securities. “It’s an upbeat signal for the semiconductor industry overall.”

Samsung spent 43.4 trillion won on manufacturing facilities last year, the most in its history. But now that its head is resuming control of the country’s most valuable company, many believe that this year’s spending on facilities will be even higher.

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