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At a time when other chipmakers are scaling back their investments, Samsung Electronics Ltd. is reportedly planning to step up chip production capacity at its largest semiconductor fabrication plant next year, South Korean media reported Sunday.

Samsung’s plan to increase chip production comes despite forecasts of an economic slowdown. Notably, the move contrasts with the actions taken by many of Samsung’s chipmaker rivals, which are looking to scale back their operations and layoff staff amid falling demand for microprocessors.

A report in Reuters says the company’s persistence will likely help it to increase its market share in the memory chip segment, where it is dominant. The move is also likely to be designed to support Samsung’s stock price when demand for chips recovers.

According to the Seoul Economic Daily, the plan is for Samsung to expand its P3 semiconductor fab in Pyeongtaek, South Korea, with the addition of 12-inch wafer capacity for dynamic random-access memory chips, which are mostly used in personal computers and servers. Furthermore, the company plans to expand the plant with new 4-nanometer chip capacity, enabling it to manufacture more advanced chips under foundry contracts – in other words, chips that are customized according to clients’ specifications.

The P3 facility is believed to be Samsung’s largest chipmaking fab, and began production of advanced, NAND flash memory chips used in mobile devices earlier this year.

As part of the expansion plan, Samsung is looking to acquire at least 10 new extreme ultraviolet machines, which are used in chip manufacturing, over the next year, the Seoul Economic Daily said.

The report comes two months after Samsung reported that its third quarter fiscal 2022 profit had fallen by more than 31% due to a slowdown in memory chip sales. Samsung said its semiconductor business, which accounts for the majority of its revenue and profit, saw its profit decline by almost 50% as a result of reduced demand for computer chips from electronics makers, server firms and cloud computing providers. However, Samsung executives told analysts at the time that the company had no plans to scale back its chip manufacturing operations, in defiance of broader industry trends that have seen many chipmakers cut output.

“We plan to stand behind our original infrastructure investment plans,” said Han Jin-man, executive vice president of Samsung’s memory business, in October.

Last week, Samsung’s biggest rival in the memory chip business, Micron Technology Inc., said it will be adjusting down its investments in fiscal 2023 and significantly reduce its capital expenditure plans. It also announced a plan to layoff up to 10% of its staff.

Photo: Samsung

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