Samsung Electronics Accelerating Foundry Facility Expansion While TSMC Slows Down

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Samsung Electronics is focusing on investing in state-of-the-art foundry facilities even as it is going through a tough time due to the deteriorating semiconductor market. On the other hand, TSMC, the world's No. 1 foundry company and Samsung Electronics' rival, has chosen to lower its annual facility investment compared to 2022 in an effort to deal with the market slump.

www.businesskorea.co.kr/, May. 12, 2023 – 

Samsung Electronics is accelerating the expansion of new foundry lines at its Pyeongtaek Plant 3 (P3) with the aim of starting its first volume production in the fourth quarter of this year, according to industry sources on May 10. The chipmaker is reportedly planning an initial trial run as early as May.

Samsung Electronics' aggressive investment in the foundry facility is in contrast to the semiconductor market in a slump. The semiconductor industry has been undergoing a major crisis since the second half of 2022 when the global interest rate and inflation hikes led to a sharp decline in demand for information technology (IT) products. Samsung Electronics, of course, is not an exception. In the first quarter of 2022, the company posted a loss of 4.58 trillion won (US$3.44 billion) due to a slump in its memory business. Memory chips account for 60 to 70 percent of Samsung's semiconductor (DS) sales. In April, the company officially announced a plan to cut its memory production.

Samsung Electronics' investment in semiconductor facilities in the first quarter was 9.8 trillion won (US$7.4 billion), up 24 percent from 7.9 trillion won (US$5.9 billion) a year earlier. The amount of investment in the semiconductor sector was also the largest during the same period. The investment in foundry lines was said to be not small. "Samsung's memory production capacity expansion is slowing down, but its foundry investments are proceeding fast," an industry insider explained.

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