UPDATED 16:28 EDT / MARCH 15 2023


Samsung to spend $230B on new chip manufacturing hub in South Korea

Samsung Electronics Co. Ltd. will spend 300 trillion won, or about $230 billion, over the next two decades to build a new chip manufacturing hub in South Korea.

The hub, which will be located near Seoul, is reportedly set to house five semiconductor plants. Some of the plants are expected to produce memory chips while others will make processors.

Samsung is the world’s largest maker of DRAM memory chips. The company’s most advanced DRAM module, which debuted last November, is the first in the industry to be made using a 12-nanometer manufacturing process. It consumes 23% less power than earlier products and can store up to 16 gigabytes of data.

Samsung is also the world’s top producer of flash memory. Last November, the company began mass producing the world’s first 1-terabyte NAND flash drive. A few months earlier, Samsung debuted a new kind of data storage module that combines flash and DRAM chips in a single package to speed up data retrieval. 

Memory chips account for the bulk of the revenue generated by Samsung’s semiconductor business. Much of the remainder comes from processors. The company’s planned chip manufacturing hub in South Korea, which is expected to house multiple processor fabs, could help grow its presence in that market.

Samsung is also investing in new chip production technologies to advance its growth plans. 

Last June, the company started mass-producing processors using three-nanometer manufacturing technology. Samsung stated at the time that the technology can provide 45% better power efficiency than five-nanometer silicon. Moreover, the company expects an up to 23% increase in performance.

Samsung’s three-nanometer process is the first in the industry to use the gate-all-around transistor architecture. A transistor comprises two main components: a so-called channel through which electricity travels and a gate, which controls the channel. In the gate-all-around architecture, the gate surrounds the channel on all sides rather than only partly as is usually the case. 

It’s possible Samsung will implement even more advanced manufacturing technologies at its planned chip hub. Last year, the company announced plans to make two-nanometer processors in 2025. Two years later, Samsung intends to introduce what it describes as a 1.4-nanometer manufacturing process. 

The $230 billion that Samsung has set aside for the chip manufacturing hub will be invested through 2042. According to Nikkei Asia, the electronics giant will use some of the hub’s production capacity to make processors for other companies.

Chip plants are supported by extensive supply chains that can comprise dozens of companies or more. Samsung hopes to draw up to 150 suppliers and other companies to its planned chip hub, TechCrunch reported today. The electronics giant will also encourage research and development organizations to open facilities on the premises. 

To support the local chip industry, the South Korean government will reportedly budget at least 360 billion won for investments in processor packaging technology. Additionally, at least 25 trillion won is expected to be allocated for investments in “strategic technologies such as artificial intelligence.” 

In the U.S., Samsung is currently building a $17 billion chip fab scheduled to come online next year. The company has also floated the possibility of constructing additional plants. Last July, Bloomberg reported that Samsung was considering to build 11 new chip fabs at a total cost of nearly $200 billion. 

Photo: Samsung

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