Samsung Electronics (005930.KS) intends to boost chip production capacity at its biggest semiconductor plant in 2023, despite forecasts of an economic downturn, a South Korean newspaper reported late on Sunday.
The move contrasts with the cutting back of investment by rival chipmakers amid slowing demand and a glut of chips. Analysts have said that Samsung’s persistence with investment plans will potentially help it capture market share in memory chips and support its share price when demand picks up.
Samsung plans to build up its P3 factory in Pyeongtaek, South Korea, by adding 12-inch wafers capacity for DRAM memory chips, the Seoul Economic Daily reported, citing unidentified industry sources.
It will also build up the plant with additional 4-nanometre chip capacity, which will be made under foundry contracts – that is, depending on clients’ designs – the paper said.
P3, which began production of cutting-edge NAND flash memory chips in 2022, is the company’s biggest chip manufacturing plant. Samsung intends to add at least 10 extreme ultraviolet machines in 2023, the newspaper said.
Samsung would not comment on the report.
In October it said it was not considering deliberately reducing chip production, going against the broader industry’s tendency to cut output to satisfy mid- to long-term demand.
“We plan to stand behind our original infrastructure investment plans,” Han Jin-man, executive vice president of memory business at Samsung, commented at the time.
Buy Crypto NowIn comparison, memory chip rival Micron Technology Inc (MU.O) said last week it would reduce its investments in fiscal 2023 to between $7 billion and $7.5 billion, from $12 billion in fiscal 2022. It would also be “significantly reducing capex” plans in fiscal 2024, it said.
Taiwanese chipmaker TSMC (2330.TW) in October adjusted down its 2022 annual investment budget by at least 10% and struck a more cautious note than usual on future demand.
“The chip industry downturn will add to the difficulties of No. 2 and below chip companies, and have a positive impact on the market control of top companies such as Samsung,” Greg Roh, head of research at Hyundai Motor Securities, said in a client note on Monday.
