Samsung to Invest $33 billion in New Semiconductor Facilities

Samsung Electronics announced on September 29 that the company will build the largest semiconductor cluster in the world in Hwaseong city of Gyeonggi province, investing $33 billion in the next seven years in an effort to develop into a top semiconductor maker.

When the construction of the cluster is completed at the end of 2012, the Giheung-Hwaseong area (including Dongtan) will emerge as a Korean Silicon Valley, reinventing itself as a semiconductor production cluster with an area of 910,000 pyeong.

The recent investment decision is interpreted as the company’s commitment to achieve “another Semiconductor miracle” by advancing far ahead of its followers through “next-next generation technology development.”

Samsung Electronics held the groundbreaking ceremony for the second Hwaseong semiconductor cluster in the presence of 500 executives and employees, including Lee Hak-soo, head of Samsung`s restructuring office, and Hwang Chang-gyu, president and CEO of Samsung Electronics’ semiconductor business.

Eight production lines and a 12-inch (300mm) wafer R&D line for future technology development will be established on 290,000 pyeong of undeveloped land in the cluster.

The new lines will produce next generation semiconductor products including Nand flash memory chips with more than eight gigabits.

Hwang said, “This is the biggest investment since the company entered the semiconductor industry in 1974. Based on the investment, we will expand semiconductor related sales to about 61 billion dollar by 2012.”

The decision to invest in the second Hwaseong cluster is to prepare for the next five to 10 years according to mid- and long-term strategies decided on in a semiconductor strategy meeting chaired by Samsung chairman Lee Kun-hee on December 6 last year, according to the company.

Samsung electronics will hire 14, 000 people, including 5,000 R&D workers, with the expansion of the product lines.

Do-Young Kim nirvana1@donga.com myzodan@donga.com