Samsung plans biggest chip factory in history

South Korean electronics company Samsung is to invest $14.7bn in constructing the world’s largest semiconductor manufacturing facility in the city of Pyeongtaek, 75km south of Seoul.

The plant is to concentrate on making dynamic random access memory (D-Ram) chips for use in mobile devices, including new markets such as smart homes and wearable tech.

Work on the plant will begin next year and be completed in the second half of 2017. When finished, the facility is expected to create 150,000 jobs, equal to about a third of Pyeongtaek’s population.

Samsung has a cash pile of about $60bn, and is aiming to use it to expand the area of its business where prices have held up best, thanks in part to a five-year-long price war that has reduced to three the number of D-Ram makers: Samsung, fellow Korean company SK Hynix and America’s Micron Technology.

At the same time, the market for this kind of chip is expected to grow rapidly in the next 10 years. Samsung said in a statement that it is shifting toward more complicated and lucrative processors that will be installed in new types of mobile device, such as wearable tech, smart cars and smart homes. 

The company is having difficulty maintaining its stronghold in the smartphone market owing to competition from Apple in the US and Xiaomi in China. Third-quarter operating profit, due to be released tomorrow, is expected to plunge 47%, and sales may show a fall of 15%, the steepest declines since 2009.

Samsung already has two other chip plants in Korea, in Giheung and Hwaseong. Last year the company had to apologise after two separate leaks of hydrofluoric acid gas killed one worker and injured four at its Hwaseong chip plant (pictured).

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