Samsung Electronics Co yesterday started construction of a new semiconductor plant intended to help fuel growth as smartphone sales slow, saying it would invest 15.6 trillion won (US$14.3 billion) until production begins in 2017.
The South Korean electronics giant, which has seen a surge in demand for chips, broke ground on the new plant in the city of Pyeongtaek, about 70km south of Seoul.
Production at the 289 hectare plant is to begin in the latter half of 2017, Samsung said in a statement.
Photo: EPA
The investment of US$14.3 billion is the largest amount the firm has ever committed to a single plant, it added.
“The Pyeongtaek semiconductor plant will play a key role in strengthening our leadership in the mobile and server markets where demand has soared recently, and secure a leading position [in] the next-generation Internet of Things market,” the company said.
The Internet of Things refers to a platform that connects a wide array of Internet-enabled devices, including refrigerators and cars.
Samsung’s chipmaking unit — the world’s second-largest, after Intel Corp — has helped cushion a recent slump in the firm’s smartphone business.
Samsung, which is the world’s top maker of smartphones and handsets in general, has reported an on-year decline in net profit for four straight quarters.
Last month, it posted a near 40 percent fall in first-quarter net profit, missing analysts’ estimates, while operating profit of the key mobile unit dropped by nearly 60 percent from a year ago.
However, operating profit of the semiconductor unit soared more than 50 percent on-year to 2.93 trillion won — and was up 8.5 percent from the fourth quarter.
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