Samsung Electronics said Monday that it would invest about 15.6 trillion won ($15 billion) to build a chip plant in an industrial complex in Pyeongtaek, Gyeonggi Province.
The South Korean tech giant will begin construction on the plant’s first manufacturing line on a 790,000-square-meter plot of land inside the 2.83-square-kilometer complex in the first half of next year. It will start producing chips in the second half of 2017.
This marks the company’s biggest investment in chip production facilities to date, well above its 7.3 trillion won investment in a semiconductor plant in Xian, China, in 2012.
Samsung Group headquarters in Seocho-dong (Yonhap)
Its investment in Pyeongtaek comes amid an expected increase in demand for chips for mobile devices, wearables, automobiles, appliances and objects connected to the Internet.
Kim Ki-nam, president of Samsung Electronics’ semiconductor unit, said the company has not yet decided whether to produce memory chips, system chips or both in Pyeongtaek.
“Given the current market conditions, (demand for) memory chips in mobile devices is expected to grow, while we expect an increase in demand for system chips in automobiles and for the Internet of Things,” Kim told reporters.
Kim added that the company will spend 5.6 trillion won to build a plant in Pyeongtaek, and 10 trillion won in equipment in the first phase with additional plans to invest more next year.
Samsung Electronics said the Pyeongtaek plant will generate value worth 26 trillion won once it starts production, and will create some 150,000 jobs.
The company decided to invest in the plant a year earlier than it initially planned, thanks to support from the provincial and Pyeongtaek governments.
“The semiconductor plant in the Pyeongtaek complex will play an important role in the future of Samsung Electronics’ chip business,” said Kwon Oh-hyun, the chief executive and vice chairman of Samsung Electronics.
The world’s biggest chipmaker is aiming to develop a high-tech semiconductor cluster linking the planned Pyeongtaek plant with the company’s chip plants in Giheung and Hwaseong in Gyeonggi Province. The 1.6-square-kilometer Hwaseong plant is currently Samsung’s biggest chip facility, followed by the 1.4-square-kilometer Giheung plant.
By Park Hyong-ki (hkp@heraldcorp.com)
