SEOUL (Reuters) – Samsung Electronics plans to increase chip production capacity at its largest semiconductor plant next year, despite forecasts of an economic slowdown, a South Korean newspaper reported late on Sunday.
This contrasts with the reduction of investment made by other chipmakers in the face of falling demand and an oversupply of chips.
Analysts have said that Samsung’s persistence with investment plans will likely help it take market share in memory chips and support its share price when demand recovers.
Samsung intends to increase its P3 factory, Pyeongtaek in South Korea by adding capacity of 12-inch wafers for DRAM memories chips, according to the Seoul Economic Daily.
It will also expand the plant with additional 4-nanometre chip capacity, which will be made under foundry contracts – that is, according to clients’ designs – the paper said.
P3, which started production of cutting-edge NAND flash memory chips this year, is the company’s largest chip manufacturing facility.
According to the newspaper, Samsung plans to install at least 10 ultraviolet machines in the next year.
Samsung refused to comment.
In October it said it was not considering intentionally cutting chip production, defying the broader industry’s tendency to scale back output to meet 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, said then.
Micron Technology Inc., the memory chip competitor, announced last week that it would reduce its investment in fiscal 2023 by $7 billion to $7.5 million, as opposed with $12 billion for fiscal 2022. It would also be “significantly reducing capex” plans in fiscal 2024, it said.
Taiwanese chipmaker TSMC reduced its 2022 annual investment budget of at least 10%. It also took a more prudent note on upcoming demand than normal.
“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.
(Reporting done by Joyce Lee and Hyunsu Yim; editing by Bradley Perrett
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