Samsung Electronics Begins Equipment Installation for Phase 2 of Xi'an Plant 2 in China... Operation to Start Mid-Year

[Asia Economy Reporter Jeong Hyunjin] Samsung Electronics has begun installing equipment for the second phase of its Xi'an Semiconductor Plant 2 in Shanxi Province, northwest China. Once this expansion investment is completed as planned, Samsung Electronics will be able to operate the Xi'an Plant 2 at full capacity, producing 130,000 NAND flash wafers per month starting from mid-year. With the surge in semiconductor demand, the full-scale operation of Xi'an Plant 2 is expected to further solidify Samsung Electronics' position in the NAND flash market.

According to China's Global Times and related industry sources on the 12th, semiconductor equipment installation began yesterday at Samsung Electronics' Xi'an Plant 2 as part of the second phase expansion investment. The second phase construction is expected to be completed and operational by mid-year. Once fully operational, the plant is anticipated to produce 130,000 NAND flash wafers monthly, accounting for 40% of Samsung Electronics' global production volume.

The Xi'an plant in China is Samsung Electronics' only overseas memory semiconductor production base. Samsung Electronics started operating the plant in Xi'an in 2014, and in August 2017, it signed a cooperation agreement with Shanxi Province, China, announcing plans to invest in Xi'an Plant 2. Subsequently, the first phase investment of $7 billion was completed in March last year, and an additional $8 billion was reportedly invested for the second phase. Vice Chairman Lee Jae-yong of Samsung Electronics also visited China in May last year, becoming the first global executive to visit after the COVID-19 outbreak. He toured the Xi'an semiconductor plant and emphasized the need to proactively prepare for the upcoming massive changes to create new growth engines.

A Samsung Electronics official explained, "Xi'an Plant 2 began operations last year after completing the first phase investment and is gradually being equipped with necessary machinery," adding, "The second phase expansion is expected to proceed as scheduled this year."

Based on this, Samsung Electronics plans to further strengthen its position in the NAND flash sector, where it has held the number one spot for 15 years since 2006. According to market research firm TrendForce, Samsung Electronics' NAND flash sales in the fourth quarter of last year amounted to $4.6444 billion, with a market share of 32.9%. TrendForce forecasts that sales may decline in the first quarter due to oversupply but expects NAND flash prices to rebound from the second quarter onward, driven by increased demand from data centers, leading to a recovery in semiconductor industry performance.

To prepare for the rapidly increasing memory demand, Samsung Electronics is expanding investments and accelerating the timeline for facility construction. Domestically, it is investing 8 trillion won in the Pyeongtaek Campus Plant 2 to establish a NAND production line, aiming for mass production in the second half of this year. Once large-scale investments at home and abroad are completed in the second half, semiconductor production is expected to accelerate centered on the three production bases in Hwaseong, Pyeongtaek, and Xi'an.

This content was produced with the assistance of AI translation services.