SEOUL -- Samsung Electronics will spend around 20.4 trillion won ($17.7 billion) to increase production of flash memory for smartphones and other devices, aiming to cement its market dominance as embattled rival Toshiba struggles to sell its semiconductor operations.
New flash memory hub
The South Korean conglomerate celebrated its first shipments Tuesday from a semiconductor plant in Pyeongtaek, on the outskirts of Seoul, that recently began mass production. Declaring the start of the next challenge for the company, Samsung said it plans to invest another 14.4 trillion won in the new factory by 2021.
The plant will be positioned as a cutting-edge hub for NAND flash memory, assuming mass production of 3-D chips with memory cells stacked vertically to increase storage. The factory currently has the capacity to produce the equivalent of around 200,000 300mm wafers per month, but the additional investment will nearly double that figure by 2021. The new spending will bring total investment in the plant to around 30 trillion won for "the largest single fab in the industry," the company said.
Samsung also said Tuesday it would invest 6 trillion won in an existing plant in South Korea's Hwaseong, but did not specify the products involved.
The company has gone on the offensive in chip investment since spring. The manufacturer laid out plans in May to invest roughly 10 trillion won at a plant in the Chinese city of Xi'an and recently said it would put $1.5 billion into a system chip factory in the U.S. state of Texas.
Widening the lead
Samsung sees the brisk semiconductor market as offering a chance to gain more ground on struggling Toshiba.
Bulk prices of benchmark flash memory products have risen at least 50% from a year ago. Higher smartphone memory capacity and strong demand from data centers have add to the crunch. Samsung's chip business turned an operating profit of 6.3 trillion won in the January-March quarter, its largest ever on a quarterly basis.
Samsung holds the top global share in flash memory with 35%, research firm IHS Technology says. The South Korean company is seen as achieving a higher product yield in mass production of cutting-edge 64-layer 3-D memory than Toshiba, which claims the No. 2 share. The two companies are "about a year apart" in mass production technology, one securities analyst said.
Toshiba has been engulfed in a struggle with U.S. partner Western Digital over the sale of its memory unit, a deal aimed to cover crushing debts. This spat has delayed adding an extra fabrication unit to a Japanese plant run by the two firms, keeping Toshiba from meeting frothing demand as international competitors ramp up production. Losing more ground also would impair the Japanese company's ability to invest in next-generation products.
In the meantime, Samsung targets a bigger slice of the pie and intends to accelerate development of next-generation 96-layer memory as well.
