Samsung's New $14 Billion Chip Plant To Manufacture DRAM, Processors In 2017 (Updated)

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Samsung's $14.3 billion (15.6 billion won) chip plant, which is supposed to help the company increase revenues as smartphone sales slow, will begin production in the first half of 2017, according to Reuters. The new plant will be built in South Korea in the city of Pyeongtaek, south of Seoul.

The company expects to spend another $9.2 billion (10 billion won) investing in additional capacity.

"The Pyeongtaek semiconductor plant will play a central role in solidifying leadership in the mobile and server markets, which have shown rapid growth in demand recently, and securing share in the next-generation internet of things market," Samsung said in a statement.

Samsung will mostly produce DRM chips at the new plant, but some capacity will also be allocated to mobile processors depending on demand.

Samsung is the world's market leader for mobile DRAM with around 40 percent market share, and it's the second-ranked chip maker by revenue, after Intel. The company has seen increasing success lately with both its foundry and its application processor businesses.

With the success of the Galaxy S6, the Exynos chip has become more popular, as well. This has given Samsung a reason to keep investing significant resources into this AP division to continue improving the Exynos line of chips.

The Exynos chips will save Samsung money by not having to buy high-end SoCs from another company. It also gives Samsung the opportunity to start selling the chips to other OEMs. However, that's unlikely to happen for now, as Samsung will probably want to keep the Exynos chips for its own products as some sort of competitive advantage and a differentiating factor.

The Exynos 7420 was already built on the company's own 14nm FinFET process, while other chip makers such as Qualcomm had to compete on a 20nm planar process and wait another cycle until Samsung freed up its foundry for customers.

On the foundry side of the chip making business, Samsung became the leader in process technology for third-party SoC makers who are looking for foundries in which to manufacture their chips. Because of that, now Apple wants to make its chips in Samsung's foundries as well, giving Samsung even more of a reason to want to put more money in its chip plants.

We have reached out to Samsung for comment and confirmation, but thus far our queries have not been filled.

Update, 5/8/15, 6:20am PST: Samsung has confirmed to Tom's Hardware that the company's new $14 billion chip plant will begin production earlier than originally planned, in the first half of 2017. Samsung hasn't yet decided what specific products will be manufactured there, but the company expects the new chip plant to help it "solidify its industry leadership in the expanding mobile and server sectors, as well as respond to growing need for semiconductor components in the Internet of Things (IoT) marketplace."

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Lucian Armasu
Lucian Armasu
Lucian Armasu is a Contributing Writer for Tom's Hardware US. He covers software news and the issues surrounding privacy and security.
16 Comments Comment from the forums
  • f-14
    were i chinas leadership, i would invade south korea and take over just to be done with intel and evade the american cia and nsa and oni. granted there are mandated back doors, but once south korea is seized, it wouldn't be much of anything to find out what those back doors are and remove them.

    too much progress might bite south korea in the rear.

    the time table for doing this would be after the 2nd chinese air craft carrier has completed sea trials.
    japan would be next through hostile negotiations with the united states during the korean invasion, to take over the security of japan as an allied partner during world war 2.
    the 2nd carrier would complete the power base required to control the region and all shipping. a 3rd carrier would be doom ensured as all of south korea could be effectively cut off and north korean leadership be cast aside and the whole of korea assimilated. pray some kind of deal isn't worked out with russia to have their carrier brought in to seal the fate of the korean assimilation.

    the u.s. would be powerless to stop it. the chinese could send the americans into a great depression and a russian alliance would seal off the far east from the west, japan could just be over run after a short carpet bombing of every american base in japan. okinawa could even be isolated first and saved for last or eliminated first as part of a stranglehold net to be formed around japan to isolate it from any help.
    Reply
  • zozzlhandler
    Which numbers are correct, the $ or the won? You appear to have messed up the conversion.
    Reply
  • skit75
    were i chinas leadership, i would invade south korea and take over just to be done with intel and evade the american cia and nsa and oni. granted there are mandated back doors, but once south korea is seized, it wouldn't be much of anything to find out what those back doors are and remove them.

    too much progress might bite south korea in the rear.

    the time table for doing this would be after the 2nd chinese air craft carrier has completed sea trials.
    japan would be next through hostile negotiations with the united states during the korean invasion, to take over the security of japan as an allied partner during world war 2.
    the 2nd carrier would complete the power base required to control the region and all shipping. a 3rd carrier would be doom ensured as all of south korea could be effectively cut off and north korean leadership be cast aside and the whole of korea assimilated. pray some kind of deal isn't worked out with russia to have their carrier brought in to seal the fate of the korean assimilation.

    the u.s. would be powerless to stop it. the chinese could send the americans into a great depression and a russian alliance would seal off the far east from the west, japan could just be over run after a short carpet bombing of every american base in japan. okinawa could even be isolated first and saved for last or eliminated first as part of a stranglehold net to be formed around japan to isolate it from any help.

    What the hell? -1
    Reply
  • uglyduckling81
    Sounds like someone is writing a new fiction novel.
    It's been done before buddy, What's your unique hook for this novel?
    Reply
  • aldaia
    According to other sources it's 15.6 TRILLION won. Anyway, to put $14 Billion in perspective, AMD reached a maximum of $3 billion capex, at that point had to spin of it's foundry. Intel estimated capex for 2015 is $8.7 billion.
    Reply
  • Cons29
    wow, somebody wants war. try having a fight in the street first bob. Go to the police station with a knife, try that there, then come back here and tell us about it. and that's not even close to a war
    Reply
  • jasonelmore
    how in the hell is samsung ever gonna make back this $23 billion investment? this is a "by the book" case when you borrow more money than you can afford.

    sure they will make millions of chips, but the utilities (electric,water,gas), health insurance, employee wages, employee retirement cuts profit margins down to stupid low levels considering the initial $23 billion you spent up front. 14 Billion + 9 billion in capacity
    Reply
  • photonboy
    jasonelmore,
    I'm fairly sure Samsung has given this slightly more thought than you have.

    Do you know their financial situation? Their plan?

    Perhaps the fact that they're a profitable world-leader in chip fabrication suggest they know something you don't?
    Reply
  • uglyduckling81
    They would of figured out how much to spend based on current and future contracts. Add a little bit for future expansion. Given how big the mobile segment is and how rapidly it's expanding this investment is probably on the conservative side.
    Reply
  • milkod2001
    were i chinas leadership, i would invade south korea and take over just to be done with intel and evade the american cia and nsa and oni. granted there are mandated back doors, but once south korea is seized, it wouldn't be much of anything to find out what those back doors are and remove them.

    too much progress might bite south korea in the rear.

    the time table for doing this would be after the 2nd chinese air craft carrier has completed sea trials.
    japan would be next through hostile negotiations with the united states during the korean invasion, to take over the security of japan as an allied partner during world war 2.
    the 2nd carrier would complete the power base required to control the region and all shipping. a 3rd carrier would be doom ensured as all of south korea could be effectively cut off and north korean leadership be cast aside and the whole of korea assimilated. pray some kind of deal isn't worked out with russia to have their carrier brought in to seal the fate of the korean assimilation.

    the u.s. would be powerless to stop it. the chinese could send the americans into a great depression and a russian alliance would seal off the far east from the west, japan could just be over run after a short carpet bombing of every american base in japan. okinawa could even be isolated first and saved for last or eliminated first as part of a stranglehold net to be formed around japan to isolate it from any help.
    were i chinas leadership, i would invade south korea and take over just to be done with intel and evade the american cia and nsa and oni. granted there are mandated back doors, but once south korea is seized, it wouldn't be much of anything to find out what those back doors are and remove them.

    too much progress might bite south korea in the rear.

    the time table for doing this would be after the 2nd chinese air craft carrier has completed sea trials.
    japan would be next through hostile negotiations with the united states during the korean invasion, to take over the security of japan as an allied partner during world war 2.
    the 2nd carrier would complete the power base required to control the region and all shipping. a 3rd carrier would be doom ensured as all of south korea could be effectively cut off and north korean leadership be cast aside and the whole of korea assimilated. pray some kind of deal isn't worked out with russia to have their carrier brought in to seal the fate of the korean assimilation.

    the u.s. would be powerless to stop it. the chinese could send the americans into a great depression and a russian alliance would seal off the far east from the west, japan could just be over run after a short carpet bombing of every american base in japan. okinawa could even be isolated first and saved for last or eliminated first as part of a stranglehold net to be formed around japan to isolate it from any help.
    were i chinas leadership, i would invade south korea and take over just to be done with intel and evade the american cia and nsa and oni. granted there are mandated back doors, but once south korea is seized, it wouldn't be much of anything to find out what those back doors are and remove them.

    too much progress might bite south korea in the rear.

    the time table for doing this would be after the 2nd chinese air craft carrier has completed sea trials.
    japan would be next through hostile negotiations with the united states during the korean invasion, to take over the security of japan as an allied partner during world war 2.
    the 2nd carrier would complete the power base required to control the region and all shipping. a 3rd carrier would be doom ensured as all of south korea could be effectively cut off and north korean leadership be cast aside and the whole of korea assimilated. pray some kind of deal isn't worked out with russia to have their carrier brought in to seal the fate of the korean assimilation.

    the u.s. would be powerless to stop it. the chinese could send the americans into a great depression and a russian alliance would seal off the far east from the west, japan could just be over run after a short carpet bombing of every american base in japan. okinawa could even be isolated first and saved for last or eliminated first as part of a stranglehold net to be formed around japan to isolate it from any help.
    were i chinas leadership, i would invade south korea and take over just to be done with intel and evade the american cia and nsa and oni. granted there are mandated back doors, but once south korea is seized, it wouldn't be much of anything to find out what those back doors are and remove them.

    too much progress might bite south korea in the rear.

    the time table for doing this would be after the 2nd chinese air craft carrier has completed sea trials.
    japan would be next through hostile negotiations with the united states during the korean invasion, to take over the security of japan as an allied partner during world war 2.
    the 2nd carrier would complete the power base required to control the region and all shipping. a 3rd carrier would be doom ensured as all of south korea could be effectively cut off and north korean leadership be cast aside and the whole of korea assimilated. pray some kind of deal isn't worked out with russia to have their carrier brought in to seal the fate of the korean assimilation.

    the u.s. would be powerless to stop it. the chinese could send the americans into a great depression and a russian alliance would seal off the far east from the west, japan could just be over run after a short carpet bombing of every american base in japan. okinawa could even be isolated first and saved for last or eliminated first as part of a stranglehold net to be formed around japan to isolate it from any help.

    China already own us all. It does not need to invade anybody. All it wants is to keep orders coming and to keep producing and producing. Look around you and see what has not MADE IN CHINA badge on it. A very little.
    Reply