Panoramic view of Samsung Electronics Pyeongtaek Campus. /Provided by Samsung Electronics
Samsung Electronics has partially suspended construction of its 5th semiconductor factory in Pyeongtaek, Gyeonggi Province. It was confirmed that construction companies were requested to stop further construction.
According to the industry on the 1st, Samsung C&T sent an official letter to some partners at the 5th factory construction site on the 30th of last month, saying, “Construction progress will be halted due to the circumstances of the ordering party in relation to the site construction,” adding, “All work, including factory production and site rental, will be suspended.” “Please stop it as of today.” The schedule for future work resumption was not disclosed.
At Factory 5, pile construction for the excavation and framework of the structure was in progress. Currently, procedures are underway to stop work except for the minimum number of personnel. Recruitment of new personnel for future work has also been halted.
Factory 5 is a new production facility that Samsung Electronics was building on its Pyeongtaek campus, and construction began in February of last year.
Pyeongtaek Campus is an outpost for Samsung Electronics’ semiconductors, covering everything from memory and system semiconductors, chip design to production and post-processing. During his visit to Korea in 2022, U.S. President Joe Biden visited here and Chairman Lee Jae-yong personally served as a guide, and recently Open AI CEO Sam Altman also visited Korea and visited the Pyeongtaek Campus.
Samsung Electronics originally planned to build six semiconductor factories on an 855,000 pyeong site at the Pyeongtaek campus, making it the world’s largest semiconductor hub. Currently, cutting-edge DRAM, NAND flash, and foundry lines are located in factories 1, 2, and 3 of the Pyeongtaek Campus, and factories 4 and 5 are currently under construction.
Samsung Electronics’ position is that this construction suspension is for inspection purposes. An official said, “In the case of Factory 5, site maintenance was done preemptively to prepare for future demand, but it has been halted for a while. He said, “It is not a complete stoppage of construction, but rather an inspection that can be adjusted flexibly,” adding, “We are constantly investing in facilities and R&D.”
Some speculate that Samsung Electronics may be adjusting the pace of factory construction and investment expansion as the semiconductor recession continues. Samsung Electronics has maintained its stance of ‘no investment reduction’ despite global competitors’ declarations of facility investment reductions.
Samsung Electronics’ Device Solutions (DS) division, which is in charge of semiconductors, recorded sales of 21.69 trillion won and an operating loss of 2.18 trillion won in the fourth quarter of last year. It was a poor performance that fell below market expectations (around 1.4 trillion won). However, despite the worsening performance, the company continued to invest in facilities and research and development (R&D) at a high level to secure future competitiveness and respond to mid- to long-term demand. Last year, an annual facility investment of 53.1 trillion won was made, of which 48.4 trillion won was in the semiconductor field.
2024-02-01 08:30:00
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