SAMSUNG HAS CONFIRMED reports that it will open a $14.4bn fabrication facility in South Korea in what will be its biggest investment in a single plant, with production scheduled to begin in the first half of 2017.
It is not known at this stage whether the fab will make logic or memory chips, but Samsung said it will be built in the city of Pyeongtaek, south of Seoul, and is expected to bolster profits in the firm's well-established and successful semiconductor business as well as grow beyond the declining sales of its smartphones.
Sources told Reuters last year when the plant will still a rumour that Samsung expects its chip production capacity to increase by a "low double digit percentage" after the facility opens.
Since then, local media has reported that Samsung plans to produce DRAM memory chips at the new plant, but that some capacity could be allocated to mobile processors depending on demand from the market.
Samsung commented: "The Pyeongtaek semiconductor plant will play a central role in solidifying leadership in the mobile and server markets, which have shown rapid growth in demand recently, and securing share in the next-generation Internet of Things market."
Such a large investment in semiconductor manufacture is telling, especially considering Samsung's poor smartphone sales last quarter.
Samsung reported a net profit of $4.35bn for the January to March quarter, a 39 percent drop on a year ago, and down from the fourth quarter.
Samsung's mobile division was the worst hit during the three-month period. The company did not mention how many smartphones it sold, but the unit saw its first-quarter operating profit plunge 57 percent year over year.
Samsung blamed this on increased competition from Apple with the iPhone 6 and iPhone 6 Plus and smaller Android device makers. µ
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