Samsung Electronics Starts Operation of Its Semiconductor Plant in Pyeongtaek

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Samsung Electronics started operating its semiconductor plant, which is constructed in Pyeongtaek and is the world’s largest plant and also announced its plan to make additional investments into semiconductors worth $32.1 billion (37 trillion KRW). It is expected that its investments will create 440,000 jobs while production inducement effect will be around $141 billion (163 trillion KRW).

Samsung Electronics held a commemoration at Pyeongtaek Semiconductor Complex on the 4th regarding shipping of first product and announced its plan to make additional investments of more than $32.1 billion (37 trillion KRW). At this commemoration, 100 board of directors and executives and employees such as CEO (Vice-Chairman) Kwon Oh-hyun of Samsung Electronics, President Kim Ki-nam, and each department heads of DS (Device Solutions) Business were in attendance.

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“Pyeongtaek Semiconductor Complex is a new challenge for Samsung Electronics’ future in semiconductor business.” said Vice-Chairman Kwon Oh-hyun. “We are extremely thankful for our executives and employees and partners for making new challenge a successful one.”

Samsung Electronics’ plant in Pyeongtaek is the world’s biggest plant based on single semiconductor line. It started constructing this plant in May of 2015 and finished construction after 2 years. Pyeongtaek Semiconductor Line will be producing cutting-edge 4th generation 64-layer V-NAND.

Picture of the outside of Samsung Electronics' first semiconductor line at Pyeongtaek Campus

Picture of the outside of Samsung Electronics’ first semiconductor line at Pyeongtaek Campus

On the same day, Samsung Electronics announced its plan to construct additional production line. 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. 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. Just the additional investments alone, Samsung Electronics is going to invest $18.2 billion (21 trillion KRW). By adding this amount to $13.5 billion (15.6 trillion KRW), which is the amount of investment for line 1 in Pyeongtaek, Samsung Electronics is investing total of $32.1 billion (37 trillion KRW) into expanding its semiconductor facilities at its business places in South Korea.

Samsung Display also announced that it is reviewing its plans to make facility investments on constructing new OLED infrastructures in Asan. It made an agreement with Chungcheongnam-do that it will start constructing Industrial Complex 2 in Asan by 2018. Although amount of investments has not been decided yet, it is likely that Samsung Display will invest significant amount of fund since it will be constructing a new industrial complex.

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. Not only its investments will help Samsung Electronics to grow along with South Korean equipment and material industries but they will also create a lot of ‘quality jobs’ in R&D and service areas.

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It is expected that economic ripple effect will be great when these investments are made. Based on The Bank of Korea’s input-output table, production inducement effect and direct and indirect employment inducement effect will be $141 billion (163 trillion KRW) and 440,000 people respectively if Samsung were to invest $32.1 billion (37 trillion KRW). Actually there were about 12,000 workers daily at the construction scene of Samsung Electronics’ Pyeongtaek Plant.

Samsung Electronics is also reviewing its plan to construct additional semiconductor line in Xi’an, China in order to actively respond to demands for memories in China. Samsung’s first semiconductor line in Xi’an, which was completed in 2014, is currently in full operation. It is heard that Samsung is currently discussing with South Korean Government and Chinese Government in order to construct additional line in Xi’an.

Staff Reporter Han, Juyeop | powerusr@etnews.com

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