Samsung is planning semiconductor investments worth $9.15B
What's the story
Samsung affiliates plan to invest a combined 12.26 trillion won ($9.15 billion) in their semiconductor operations, The Korea Herald reported. Out of this, nearly 8 trillion won ($5.99 billion) will be invested in Vietnam alone. The move is part of a broader strategy to expand high-end production capacity while also meeting the growing global demand for semiconductors.
Investment details
Major investment in memory chip testing facilities
Samsung Electronics will invest 105.79 trillion Vietnamese dong ($4.09 billion) in memory chip testing facilities at Yen Binh Industrial Park in Thai Nguyen, northern Vietnam.
The first production line is expected to start operations by Q4 2027, with another one planned for 2028.
These facilities will conduct final tests of DRAM and NAND flash chips packaged at Samsung's Cheonan plant in South Korea.
Strategic shift
Expanding overseas testing capacity
The investment is aimed at expanding overseas testing capacity, not moving wafer manufacturing out of South Korea.
Joo Seung-hwan, a professor at Inha University's Graduate School of Manufacturing Innovation, said this strategy seems to keep high-value products like high-bandwidth memory in Cheonan and Onyang facilities, while shifting more conventional memory work to Vietnam.
However, Samsung hasn't revealed how testing volumes will be split between these countries.
Funding
Reinvested profits to fund expansion
Around 63% of the planned investment in the Vietnamese testing facilities, or 66.64 trillion dong ($2.58 billion), is expected to come from reinvested profits from Samsung's local operations.
This move highlights the company's commitment to its expansion plans in Vietnam while also ensuring that a significant portion of the funding comes from its own resources.
Capacity expansion
Expansion of flip-chip substrate capacity
Samsung Electro-Mechanics is also expanding its flip-chip ball grid array substrate capacity with an investment of 6.78 trillion won ($5.08 billion).
Of this, 4.27 trillion won ($3.20 billion) will go into Sejong, South Korea, and 2.51 trillion won ($1.88 billion) in Vietnam.
These substrates connect high-performance processors to circuit boards and are increasingly in demand as AI servers require larger and more complex chip packages.