Hot DRAM! Samsung splurges $15 BILLION on Korean chip fab

Samsung Electronics has decided to spend a massive $15bn building a memory fab in South Korea.

Samsung is the world’s largest DRAM chip maker, followed by Micron and SK Hynix. It also leads the NAND chip market, being ahead of Toshiba, SanDisk, Micron and SK Hynix. Toshiba and SanDisk are partners in flash fabrication.

The new plant will be in Pyeongtaek, some 50 miles south of Seoul, and could create up to 150,000 jobs. The plant’s output could be either logic (processor) or memory chips. The latter would be be used for mobile phones - including its own, tablet. notebook, desktop and server computers and, probably, embedded computers in Internet of Things devices.

NAND chips might also be made with output going into consumer and business devices, ranging from digital cameras as to servers.

On the logic front Sammy is making ARM processors and competing with TSMC (Taiwan Semiconductor Manufacturing Company) for business from customers such as Apple.

Construction of the building complex should start in 2015 and be complete by the middle of 2017. We reckon Sammy has about a year to decide what whether the plant will produce logic or memory chips.

Fifteen billion dollars is a huge amount of cash. If Micron or the others want to get similar economies of scale from their foundries that’s the size of the bet they have to make. They have to be rock-solid certain that the market demand for the extra output will be there so as to avoid profit-destroying chip supply gluts. ®