Samsung to Increase Chip Production at Largest Factory Next Year

Samsung Electronics plans to increase chip production capacity at its largest semiconductor plant next year despite forecasts of an economic slowdown, a South Korean newspaper reported. Analysts said Samsung's persistence in its investment plans will likely help it gain market share in memory chips and support its share price when demand improves.

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Samsung Seeks to Stand Out from Competitors with Chip Investment

Samsung plans to expand its P3 fab in Pyeongtaek, South Korea, by adding 12-inch chip capacity for DRAM memory chips, according to industry sources. The news also reveals that it will expand the plant with additional 4-nanometer chip capacity to be built under foundry contracts, i.e. according to customers' designs.

P3, which started production of state-of-the-art NAND flash memory chips this year, is the company's largest chip manufacturing facility. Other information includes that Samsung plans to add at least 10 extreme ultraviolet machines next year. Samsung declined to comment on the report. It said in October that it did not intend to deliberately cut chip production, defying the broader industry's trend of cutting production to meet medium- and long-term demand.

"We plan to stand behind our original infrastructure investment plans." said Han Jin-man, vice president of Samsung's memory business. In contrast, memory chip rival Micron Technology Inc. said last week it would cut its investments from $12 billion in fiscal 2022 to between $7 billion and $7.5 billion in fiscal 2023.

Taiwanese chipmaker TSMC cut its 2022 annual investment budget by at least 10 percent in October, striking a more cautious note than usual on upcoming demand. Greg Roh, head of research at Hyundai Motor Securities,"The downturn in the chip industry will increase the challenges for chip companies at No. 2 and below and will have a positive impact on the market control of top companies like Samsung."