Samsung Plans $18 Billion of New Investments in Chip Production

Samsung Electronics Co., the world’s biggest maker of memory chips, announced 20.4 trillion won ($18 billion) of new investments to expand semiconductor output in South Korea.

After spending 15.6 trillion won on its Pyeongtaek plant south of Seoul, total investment in the facility will rise to 30 trillion won by 2021, it said in an statement Tuesday. The Suwon-based company will also commit 6 trillion won to expand production in Hwaseong while it also considers a new display manufacturing site for organic light-emitting diodes by 2018 and a second production line at Xi’an in China.

The construction of Samsung’s new semiconductor plant in Pyeonogtaek, South Korea.

Source: Samsung Electronics

Samsung announced the spending plans as it started mass production of chips from the Pyeongtaek facility just over two years after breaking ground on the plant. The company is building capacity to cater to an expected surge in demand from Internet of Things, artificial intelligence and automotive technologies.

Samsung’s fourth-generation V-NAND memory products.

Source: Samsung Electronics

While known to consumers for its smartphones and televisions, Samsung’s chip business is its biggest contributor to earnings, supplying to makers of mobiles, computers and other devices. In 2016, semiconductors generated 46.5 percent of operating income at the company, according to data compiled by Bloomberg.

Shares of Samsung were unchanged at 2.361 million won as of 11:48 a.m. in Seoul.

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