Samsung Electronics has partially halted the construction of its fifth semiconductor plant in Pyeongtaek, Gyeonggi Province.
According to industry sources on Feb. 1, Samsung C&T sent a notice to some subcontractors at the construction site of the fifth plant on Jan. 30, stating that “due to the circumstances of the ordering party, the progress of construction work will be suspended” and asked for all operations including manufacturing and site leasing to be stopped as of today. No schedule for resuming work was provided.
The fifth plant was undergoing piling work, which involves digging and setting the structural framework. Currently, procedures to suspend work, excluding a minimal workforce, are underway. The hiring of new workers for future tasks has also been halted.
The fifth plant is a new production facility that Samsung Electronics had been constructing within its Pyeongtaek Campus, which began in February last year. The Pyeongtaek Campus is Samsung Electronics’ semiconductor base, encompassing memory and system semiconductors, chip design, production, and post-processing. President Joe Biden of the United States visited this site during his visit to Korea in 2022, with Chairman Lee Jae-yong personally guiding him. Recently, Sam Altman, CEO of OpenAI, also visited Korea and toured the Pyeongtaek Campus.
Samsung Electronics originally planned to build six semiconductor factories on the 855,000 square meter site of the Pyeongtaek Campus to create the world’s largest semiconductor hub. Currently, the first, second, and third plants at the Pyeongtaek Campus house cutting-edge DRAM, NAND flash, and foundry lines, while construction of the fourth and fifth plants is ongoing.
Samsung Electronics stated that the construction halt is for inspection purposes, but some speculate that the company is adjusting the pace of factory construction and investment expansion due to the ongoing semiconductor downturn. Despite global competitors announcing reductions in equipment investments, Samsung Electronics has maintained a stance of not reducing investments.
Meanwhile, Samsung Electronics’ Device Solutions division recorded sales of 21.69 trillion won (US$16.37 billion) and an operating loss of 2.18 trillion won in the fourth quarter of last year, underperforming market expectations (around 1.4 trillion won). Despite the downturn in performance, the company continued to make significant investments in facilities and research & development (R&D) to secure future competitiveness and respond to medium-to-long-term demand. Last year, the company executed facility investments totaling 53.1 trillion won, with approximately 48.4 trillion won allocated to the semiconductor sector.