New Plant Expected to Sharpen Samsung's Competitiveness

Samsung Electronics’ semiconductor plant in Xian, China

Samsung Electronics’ NAND flash plant in Xian, China, has recently completed the expansion of its second plant and started its full-scale production.

The plant completed the second-phase expansion last month, following the first phase at the end of 2021.

The second plant has been operating at full capacity since the beginning of March. The plant can process 130,000 sheets of 12-inch (300mm) wafers per month, higher than 120,000 sheets per month at the first plant. Accordingly, Samsung Electronics’ production of NAND flashes at its Xian plant has climbed to 250,000 sheets of wafers per month.

This volume accounts for more than 40 percent of Samsung Electronics’ total NAND flash production. The Samsung Xian plant has the largest production capacity in the world among NAND flash factories.

“According to the Shanxi Province authorities, the Xian plant’s total production exceeds 10 percent of the world’s NAND flash production,” said the Shanxi Daily, a local newspaper in China.

The Xian NAND flash plant is Samsung Electronics’ only overseas memory semiconductor plant. The construction of the first plant began in September 2012 and the plant began production in May 2014. Samsung Electronics initially planned to invest US$7 billion (8.533 trillion won) in the construction of the first plant. However, as the line was increased and back-end processes were added, the total investment rose to more than US$10.87 billion (13.25 trillion won).

For the second NAND flash plant, ground was broken in 2017, with the initial investment set at US$7 billion (8.533 trillion won). An additional US$8 billion (9.752 trillion won) was invested in 2019 to expand the plant and upgrade production equipment. As a result, Samsung Electronics poured a total of US$25.87 billion (31.536 trillion won) into the NAND flash plant in Xian.

Samsung Electronics expects the Xian plant to sharpen its NAND flash competitiveness. As of the fourth quarter of 2021, the company maintained its top position in the industry with NAND flash sales of US$6.11 billion (7.448 trillion won) and a market share of 33.1 percent. However, SK Hynix and Micron Technology of the United States are ​closely trailing Samsung. For example, SK Hynix took over the NAND flash division from Intel and Micron succeeded in the first 176-layer product mass production ahead of Samsung.

Industry insiders expect that Samsung Electronics’ NAND flash market share will expand from 35 percent to 40 percent as the second Xian plant goes live.

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