A Record High

Samsung Electronics is expected to invest 35 trillion won in semiconductor facilities this year.

Samsung Electronics is expected to invest 35 trillion won in semiconductor facilities in 2021, a record high that is up 20 percent from 28.9 trillion won in 2020.

Stock analysts expected that the company will spend 24 trillion won on memory chips and 11 trillion won on system semiconductors.

"Samsung Electronics is expected to invest aggressively in system semiconductors this year while taking a more conservative approach to DRAMs," said Kim Sun-woo, a researcher at Meritz Securities. TSMC, which is Samsung’s main competitor in the foundry business, already announced that it will invest 30 trillion won in 2021 alone. Samsung Electronics, a latecomer compared to TSMC, has no choice but to aggressively invest in foundry facilities.

Samsung Electronics will invest not only in Korea but in the United States and China at the same time. In Korea, its plant in Pyeongtaek will be transformed into a production base for memory and system semiconductors.

V-NAND and foundry lines are currently being built at Plant 2 in Pyeongtaek. Samsung will invest a total of 30 trillion won in the project. Foundry lines were brought in earlier this year and operations are scheduled to begin in the second half of 2021.

In addition, the building for Plant 3, which is to produce memories and foundry products, is expected to be completed in 2021. The new plant is expected to go online in 2023. As Plant 3 is larger than Plant 2, the total construction cost of Plant 3 is expected to top 30 trillion won.

For the Xian plant in China, the second-phase investment in its second plant will be completed in 2021. Samsung Electronics invested about US$9 billion in the first phase and US$8 billion in the second phase.

All attention is focused on whether the Korean semiconductor giant will invest to build a second plant in Austin, the United States. Recently, foreign media outlets reported that Samsung Electronics is considering building a factory that can produce 3-nm and sub-3nm chips by investing more than US$10 billion. "Nothing has been decided regarding the investment," a Samsung official said. Industry insiders believe that Samsung Electronics may be able to finish the construction of a building for the second plant in Austin within 2021, but will hardly be able to set up production lines on a full scale in light of such issues as securing customers and geopolitical risks.

Taiwan's DigiTimes reported that TSMC won an order from Intel to produce 3-nm CPUs. The report threw a wet blanket over Samsung Electronics’ contract with Intel to produce its Southbridge chipsets.

Samsung Electronics also has to take geopolitical factors into consideration in deciding to expand its U.S. plant. "Samsung Electronics may appear to China as a pro-U.S. company if and when it expands investment in the U.S. right after President Joe Biden took office," said an official of the Korean semiconductor industry.

Copyright © BusinessKorea. Prohibited from unauthorized reproduction and redistribution