Samsung spends $9.2 billion to increase fab capacity

SamsungSamsung Electronics has written a $9.2 billion to boost capacity at its new South Korean chip plant.

This represents a 64 percent increase over announced investment plans and is its biggest ever commitment to a single production facility.

It is being seen as a move to make semiconductors to offset slowing smartphone earnings.

The plant is scheduled to begin production in 2017 and will make DRAM memory chips and some mobile processors.

A Samsung spokeswoman said the firm has not decided on any additional investments or what products the new plant would make.

The new plant, which will be located in Pyeongtaek south of Seoul, has led to some worries about the industry’s medium-term outlook.

Samsung and SK Hynix have reported robust memory chip earnings in recent quarters, partly because careful capacity management across the industry.

Samsung has always said it will seek sustainable memory chip profit growth, suggesting that it will not initiate a price war.

But the investment does mean that it will be investing shedloads into expansion in what is likely to be DRAM.