Samsung Building its 6th Domestic Chip Factory

Leading South Korea based producer of multiple consumer electronics Samsung Electronics Co. (KRX: 005930) has made public its upcoming project to build a sixth domestic contract chip production line. The new plant will largely specialize in manufacturing logic chips for computers and mobile phones.

Samsung says the upcoming project is in line with its plan to reduce dependence on the unpredictable memory chip sector.

This new production facility will expand Samsung’s manufacturing capabilities,” said Samsung in a press release.

Currently, Taiwan Semiconductor Manufacturing Co Ltd (TSMC) is leading the industry as the largest contract chip manufacturer, Samsung is looking to dethrone TSMC by competing with chipmaker for chip orders from clients including Apple Inc. (AAPL) and Qualcomm Inc. (QCOM).

This is Samsung’s effort to narrow the gap with TSMC, as it still lags behind TSMC in the contract chip making market,” said an analyst at Cape Investment & Securities, Park Sung-soon.

Additionally, Samsung said it’s looking forward to start producing advanced 5 nanometre chips using advanced ultraviolet (EUV) technology beginning from the second half of next year.

Currently, Samsung runs five foundry lines in South Korea and one in the United States, earlier in the month the firm’s President Jae-in said among his goals is to nurture non-memory industry for economic growth.

In 2019, Samsung announced it will be investing 133 trillion won ($107.97 billion) in non-memory chips by 2030, the investment will compose 60 trillion won for production infrastructure and 73 trillion won for domestic R&D.

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