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Samsung Reportedly Invests $8B More in China Plant

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Samsung is betting on China. Reuters, citing Chinese state media, today said the company plans to invest another $8 billion in a NAND production facility in Xi'an.

The investment could allow Samsung to improve production of its NAND flash; it could also be an attempt by the company to curry favor with the Chinese government as it becomes increasingly hostile to foreign technology companies.

Either way, the additional investment might seem odd, given that Samsung's quarterly revenues declined between 50-60% year-over-year for all of 2019. Those drops were largely attributed to the memory market's continued pricing woes.

Samsung previously said it would limit memory production in an effort to keep pricing stable. That was in September 2018--the market's decline throughout 2019 shows how well that strategy worked. (Which is to say that, in many ways, it didn't.)

The company's also facing increased competition in the NAND market. Yangtze Memory Technologies, a China-based company, reportedly started volume production of 64-layer 3D NAND in September with plans to increase output in 2020.

Which means a company whose quarterly revenues have been halved for the last year because of declining memory prices that's facing increased competition--which could drive prices even further down--is investing $8 billion into a production facility.

And that's after the initial $10.8 billion investment as well as an additional $7 billion invested in 2017. Regardless of the motivation, that investment shows that Samsung isn't too concerned about the memory market, or at least does a good job hiding it.

  • Giroro
    Maybe Samsung wouldn't be facing so many Chinese government-sponsored competitors if Samsung stopped sending their confidential designs and methods to a country that intercepts 100% of all internet traffic, bans encryption/VPNs, and is highly motivated to steal their IP.
    Reply
  • hotaru251
    "Samsung is betting on China. "


    casue we all know how well China is liked atm by basically entire world (barring themselves, HK police, and north korea)
    Reply
  • hannibal
    Maybe Samsung will reduce production outside of China fabs?
    Reply