Samsung Electronics has decided to make its planned investments for its semiconductor business earlier than their initial scheduled dates. Its decision comes from the fact that the global semiconductor market has recently started to face short supply and entered a supercycle. Because its decision affects the company’s foundry and NAND flash businesses in addition to the company’s DRAM business, which is its major business, it is expected to have a significant impact on the global semiconductor market.
According to the industry on Monday, it is reported that Samsung Electronics recently changed its plan for this year’s DRAM investment.
Initially, the company was planning to make an investment that would add monthly capacity of 30,000 12-inch wafers to the company’s P2 fab in Pyeongtaek. However, the company has decided to increase the investment so that the capacity would increase to 40,000 wafers. As a result, the company’s plan for this year’s DRAM investment will increase from 60,000 wafers to 70,000 wafers.
40,000 wafers are about 60% of 70,000 wafers. This indicates that the company is looking to push forward expansion that much more.
The company also plans to increase its investment for its foundry business. It has decided to increase the production capacity of the 5nm foundry line that is being built at the P2 fab from 28,000 wafers to 43,000 wafers. It has also decided to use its new EUV lithography system, which was supposed to be used for DRAM, for foundry in order to deal with demands for 5nm foundry that have been increasing rapidly first.
The company is also looking into increasing its scheduled investment for NAND flash as well. It is currently building facilities for 6th generation 128-layer NAND at its Xian Fab 2 and there is a chance that the company will change the scheduled investment for this first half so that the monthly production capacity of up to 80,000 wafers will be added to the fab instead of 50,000 wafers.
Actually, the semiconductor equipment industry is operating its production capacity on full scale in order to meet increased orders for Samsung Electronics.
One high-ranking official from the industry said that most of semiconductor equipment manufacturers that supply equipment to Samsung Electronics have been very busy recently.
The fact that the global semiconductor market has been on an upward trend is the reason why Samsung Electronics is deciding to increase its scheduled investments. The memory semiconductor market is expected to face a rapid growth this year as the markets for electric vehicles, smartphones, and data centers are all making growth.
Increased exports and a rising trend in memory prices are being detected within the market.
According to Korea Customs Service, the amount of memory semiconductor exports between January 1 and February 20 was $1.73 billion which is an 14.9% increase compared to the amount from the same period last year. The spot price of DDR4 8G 2400Mbps, which is widely used as a PC DRAM, surpassed four dollars on February 22 after staying below the mark for 22 months due to increased demands.
It is likely that Samsung Electronics is pushing forward and is increasing the amounts of scheduled investments because it believes that this short supply trend will become even more intensified in the future.
There is also short supply in the foundry market as well. Although demands for smaller semiconductors under 10 nanometers are increasing, only Samsung Electronics and TSMC are the only two foundry companies that are able to manufacture these semiconductors. Samsung Electronics is also increasing its foundry investment in order to chase right behind TSMC, which is the top foundry company in the world.
Samsung Electronics is likely increasing its NAND flash investment in order to be far ahead of companies that are trying to chase after it.
“While Samsung Electronics’ competitors are trying to rapidly narrow the gap in technology between themselves and Samsung Electronics by being the first ones to release 176-layer NAND flash memories, Samsung Electronics that occupies more than 40% of the global memory market is looking to overpower them with competitive price through huge supplies.” said one industry official. “Samsung Electronics realizes importance of “economy of scale” for its memory business and plans to maintain its leadership in the global market through economy of scale.”
Staff Reporter Yun, Geonil | benyun@etnews.com & Staff Reporter Kang, Hyeryung | kang@etnews.com