Samsung plans $18.6 billion South Korea investment amid chip boom

Samsung memory chip business

Samsung to invest $18bn in chips

In hopes of retaining the number one spot in the future, the company has announced its plans to invest at least $18.6 billion in its home country to boost production of memory chips.

Some analysts said Samsung's production technologies are at least a year ahead of rivals such as Toshiba and SK Hynix.

Memory chip

Internet of Things and automotive technologiesRecent emerging IT trends such as the Internet of Things (IoT), artificial intelligence (AI), big data and automotive technology has sharply increased demand for next-generation hardware components. Samsung Electronics will expand its fab in Xi'an, China, which has been running at full capacity after construction was complete in 2014. Pyeongtaek Semiconductor Line will be producing cutting-edge 4th generation 64-layer V-NAND. The higher the number of layers, the more the data can be stored at a faster data processing speed. Industry sources and analysts said the shortage is more acute for NAND chips due to increasing adoption of high-end storage products. However, the shortages are expected to remain through this year, as new production lines reportedly won't make meaningful supply contributions until 2018. The company held an event to celebrate the shipment in the presence of about 100 employees including Kwon Oh-hyun, the company's vice chairman, and Kim Ki-nam, president of Samsung's semiconductor business. The new plant on Pyeongtaek has started mass producing the first chips, that one did cost nearly 12 billion and will focus on the production of Samsung's fourth-generation V-NAND (64 layers).

It will also put KRW 6 trillion ($5.2bn) towards a new semiconductor fabrication line at its site in Hwaseong with the latest equipment, including Extreme Ultra Violet (EUV) kit, being installed.

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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.

China is trying to grow its own memory chip producers but it may take several years before Chinese companies can compete with existing makers.

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Samsung will make a huge investment towards the expansion and upgrade of its memory chip and smartphone business in South Korea.

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