Korean firm strives to remain ahead of the curve
South Korea’s Samsung Electronics announced on March 15 that it would invest $230 billion to build five new factories in the country over the next two decades.
With the investment, the company noted that it strived to establish the world’s largest semiconductor production facilities in Yongin, about 40 kilometers south of Seoul.
To support the whopping investment, the firm’s affiliates of Samsung Display, Samsung SDI, and Samsung Electro-Mechanics also plan to spend $46 billion in Yongin.
Thus far, South Korean companies were discouraged from constructing new factories near Seoul as the country vied to ease overcrowding of the metropolitan capital city.
However, the South Korean government has decided to build a semiconductor cluster in Yongin to support the country’s corporations in the stiff global semiconductor competition.
Toward that end, South Korea has designated approximately 2.75 square miles of land in Yongin to accommodate the factories of Samsung and other firms.
Observers point out that South Korea is desperate to remain ahead of the pack in the global semiconductor competition.
The country is home to Samsung and SK hynix, the world’s No. 2 memory chip maker. However, the two outfits have struggled due to the decreasing demand for memory chips.
By contrast, Taiwan’s TSMC has fared well based on its strength in the foundry market. The outfit held a 58.5 percent share of the foundry market compared to Samsung’s 15.8 percent during the fourth quarter of last year, according to business tracker Trendforce.
“Both Samsung and SK hynix are required to find new momentum at a time when they are expected to face big deficits due to the slump in the memory chip business,” Korean consultancy Leaders Index CEO Park Ju-gun said.
“The recently announced investment plans of Samsung Electronics and its subsidiaries demonstrate their efforts to beef up competitiveness in the global chip market.”
The share price of Samsung Electronics rose 1.36 percent on March 15 on the South Korean stock exchange.