Samsung investing $18bn to expand memory chip business

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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 global competitors ramp up production.

"With the dedication and support of our employees, customers and partners, our new Pyeongtaek campus represents a new chapter in Samsung's semiconductor operations", said Kwon Oh-hyun, vice chairman and CEO of Samsung Electronics, at the ceremony. First of all, it is going to invest about $12.5 billion (14.4 trillion KRW) until 2021 to extend second floor of its first semiconductor line in Pyeongtaek. Samsung's fourth-generation V-NAND is 3-D and stacks 64 layers of cells to store up to 256 gigabits of data.

In hopes of retaining the number one spot in the future, the company has announced its plans to invest at least $18.6 billion in its home country to boost production of memory chips. It is also going to invest $5.21 billion (6 trillion KRW) in Hwasung and construct a new state-of-the-art system semiconductor line that will have next-generation EUV (Extreme Ultraviolet) lithography equipment.

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The new domestic investments are forecast to create a total of 163 trillion won worth of economic effects and 440,000 new jobs, according to data from the Bank of Korea.

As Samsung is making large amount of investments into semiconductors and displays, it has created a cluster that connects Giheung, Hwasung, and Pyeongtaek from Gyeonggi-do and Asan from Chungcheongnam-do. The global shortage of chips though could drive the prices high which is a benefit to Samsung as it could drive their profits even higher in the coming financial periods, thus permanently unseating Intel as the leading chip maker and this is evident as it continues its investment in production facilities. The existing factory is operating at full capacity.

The latest move reportedly comes as a response to repeated calls to big corporations from the South Korean government to invest domestically as part of a job-creation plan. It is heard that Samsung is now discussing with South Korean Government and Chinese Government in order to construct additional line in Xi'an.