Samsung to invest $19bn in memory chip and display plants in South Korea

Samsung to invest $19bn in memory chip plantReuters/Kim Hong-Ji

Samsung is planning to invest 21.4tn won (about $18.6bn, £14bn) in South Korea to extend its lead in memory chips and next-gen smartphone displays, the company said on Tuesday, 4 July.

The investment includes 14.4tn won by 2021 on Samsung's new NAND factory in Pyenogtaek and an additional 6tn won in a new semiconductor production line in Hwaseong, reports Reuters.

The company will also add a production line to its NAND factory in Xi'an, China to meet the demand for data storage chips.

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Samsung's investment comes as South Korean President Moon Jae-in calls on local business to create more jobs and help bolster the economy.

Samsung said this investment could create up to 440,000 jobs through 2021, along with booming the economy.

Besides, Samsung Display plans to invest around 1tn won on a new organic light-emitting diode display complex in South Korea.

Samsung's production technologies are a year ahead of rivals such as Toshiba and SK Hynix, believes analyst. The company invests more than $10bn in semiconductors every year.

Samsung, Toshiba and SK Hynix have invested tens of billions of dollars to boost NAND output in recent years, but shortages are likely to persist through 2017.

Samsung has accounted for 40.4% of global memory chip revenue in January-March, estimates TrendForce.

"I believe NAND market conditions will continue to favor suppliers until 2020," HMC Investment analyst Greg Roh told Reuters, adding any oversupply issues will be temporary and limited to seasonally weaker periods.

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