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Samsung Plans to Expand Chip Production at Largest Plant in Face of Economic Slowdown

Samsung Electronics, the South Korean technology giant, is set to increase chip production capacity at its largest semiconductor plant next year, according to a report from the Seoul Economic Daily.

Samsung Logo on Blue Background

The move comes despite forecasts of an economic slowdown and stands in contrast to the scaling back of investment by rival chipmakers amid falling demand and a glut of chips.

Samsung's Investment Plans Could Help Boost Market Share and Support Share Price

Analysts have suggested that Samsung's persistence with its investment plans will likely help the company take market share in the memory chip market and support its share price when demand recovers. "The chip industry downturn will add to the difficulties of No. 2 and below chip companies, and have a positive impact on the market control of top companies such as Samsung," said Greg Roh, head of research at Hyundai Motor Securities.

Samsung to Expand P3 Factory in South Korea with Additional Capacity for DRAM and 4-Nanometer Chips

According to the report, Samsung plans to expand its P3 factory in Pyeongtaek, South Korea, by adding capacity for 12-inch wafers of DRAM memory chips. The company will also expand the plant with additional 4-nanometer chip capacity, which will be made under foundry contracts, or according to clients' designs. P3 is Samsung's largest chip manufacturing facility and began production of cutting-edge NAND flash memory chips this year.

Samsung to Add at Least 10 Extreme Ultraviolet Machines in 2022

In addition to expanding chip production capacity, Samsung is also planning to add at least 10 extreme ultraviolet machines to its operations next year, according to the report. The company has declined to comment on the report.

Samsung Defies Industry Trend of Cutting Chip Production

In October, Samsung stated that it was not considering intentionally cutting chip production, defying the broader industry trend of scaling back output to meet mid- to long-term demand. "We plan to stand behind our original infrastructure investment plans," said Han Jin-man, executive vice president of the memory business at Samsung. In contrast, memory chip rival Micron Technology announced last week that it would adjust its investments in fiscal 2023 to between $7 billion and $7.5 billion, compared with $12 billion in fiscal 2022, and would also be "significantly reducing capex" plans in fiscal 2024. Taiwanese chipmaker TSMC also cut its 2022 annual investment budget by at least 10% and struck a more cautious note than usual on upcoming demand in October.