Samsung Increases Chip Investment To $151 Billion Amidst 50% Tax Break Promises In Korea
South Korean chaebol Samsung Electronics has increased its capital expenditure budget for manufacturing semiconductors announced the company earlier today. Samsung's original plan, which covered investments in chip fabrication until 2030, outlied 133 trillion Korean Won in expenditure, and today the company has increased this to 171 trillion Won, which roughly equals $151 billion. Samsung announced the increase at an event held in its Pyeongtaek campus by the South Korean government.
Samsung, SK Hynix To Receive Up To 50% In Tax Credits As South Korea Speeds Up Investment InChip Production
At the Pyeongtaek facility, South Korean President Moon Jae-in stressed the need for his country to catch up globally in chip fabrication. At the event, President Jae outlined his country's plans for the future and stated that:
Korea will achieve its goal of becoming the world’s top integrated device manufacturer, including the system-on-chips by 2030,” President Moon Jae-in said during the event at Samsung’s Pyeongtaek complex.
Based on the prowess of the country’s semiconductor industry, Korea will also preoccupy competitive edges in all industries to take a new leap in the post-coronavirus era. Through concerted efforts by the private sector and the government, Korea will overcome the wave of risks of reshaping global supply chains.
His statements centered around the Korean government's K-Semiconductor Strategy, which plans to establish a K-Chip belt in the country that will consist of the semiconductor supply chain.
As part of the event, Samsung announced increasing its capital expenditure to 171 trillion Korean Won. The previous figure was set at 133 Won in April last year, and the upgrade involves expanding Samsung's current chip production lines and researching leading-edge chip fabrication technologies.
Samsung plans to complete the construction of its Pyeongtaek-3 chip facility next year. This facility will manufacture memory products using the 14nm chip process node and computing chips on the 5nm node by using Extreme Ultraviolet (EUV) lithography.
Commenting on the current state of the chip sector, Samsung's vice chairman and head of Device Solutions Divison, Mr. Kim Ki-nam, stated:
The entire semiconductor industry is facing a watershed moment and now is the time to chart out a plan for long-term strategy and investment. For the memory business, where Samsung has maintained its undisputed leadership position, the company will continue to make preemptive investments to lead the industry.
Samsung also outlined its plans to bring EUV manufacturing to memory modules. In chipmaking, smaller transistor sizes achieved through the latest technologies such as 7nm and 5nm require 'finer' light waves to print the circuits on pre-prepared silicon wafters. Compared to Deep Ultraviolet (DUV) lithography, EUV uses smaller wavelengths for chip fabrication, allowing chipmakers to squeeze in more circuits in a similar area of silicon than they could with DUV.
A crucial member of the K-Chip belt will be the Dutch company ASML. It is currently the only company in the world capable of building EUV machines. Therefore, any chip maker who aims to develop the latest manufacturing technologies must procure its equipment from ASML. The company will invest 240 billion Won in the South Korean city of Hwaesong, where it will open an office, a training center, and crucially, a remanufacturing sector for EUV machines.
A representative from SK Hynix, who was also present at the event, outlined his company's plans. According to him:
We will invest in the 8-inch foundry business to support the development and mass production of domestic fabless (Fabless, system semiconductor design companies) as well as advance into the global market. We can broaden the range of semiconductor product supply.