Samsung Electronics Co. plans to invest more than US$1 billion in the Austin plant, Texas, by the first half of next year in order to expand the production capacity of advanced system-on-chip products. Samsung’s decision to make more than one billion dollar investment in its system semiconductor facilities is exceptional.
According to Samsung Electronics on November 1, Samsung Electronics America Inc. has decided to inject more than US$1 billion (1.14 trillion won) into the expansion of its Austin semiconductor facilities by June 2017. Samsung's System LSI business division currently operates its semiconductor foundry bases in the S1 plant in Giheung, Gyeonggi Province, and the S2 plant in Austin. The plants mainly produce mobile application processors (AP) designed by Samsung Electronics as well as Apple and Qualcomm.
Samsung Electronics’ movement to enhance its chip production at the Austin plant by investing US$1 billion) for eight to nine months is to take the lead in the system semiconductor market in where the company has relatively small dominance. Samsung chip foundry business has been lagging behind Taiwan’s TSMC. The company also falls behind Qualcomm, Apple and Intel in the semiconductor design sector. Although Samsung Electronics developed its 14-nm FinFET manufacturing process for the first time in the world and successfully produced mobile AP integrated chip, which only Qualcomm had such technology, raising its technical skill to higher levels, the company still has a small fraction of shares in the market.
A system semiconductor is a vital part of Samsung Electronics’ next growth engines, such as the Internet of Things (IoT), artificial intelligence (AI) and automotive electronic equipment, as well as smartphone. The company’s latest decision is part of its effort to boost the competitiveness of core business in the future. Samsung Electronics has established the Samsung Strategy and Innovation Center (SSIC) in Silicon Valley, CA, and it is aggressively acquiring advanced technology venture firms, including Viv Labs which has the IoT-based smart home technology SmartThings and voice recognition-based AI technology.
Samsung Electronics has already moved its System LSI research & development center in Austin to a new building which is twice as big, and is hiring new employees with expertise in the semiconductor areas, such as AP and image sensor. In addition, Samsung Advanced Institute of Technology is also recruiting experts in the deep learning and AI sector.
Since its establishment in 1997, Samsung Electronics has invested more than US$16 billion (18.3 trillion won) in its Austin R&D center and facility.