Samsung Boosts Pyeongtaek Chip Plant Investment to $3B

Samsung is ramping up construction of its massive semiconductor hub in Pyeongtaek, Gyeonggi Province. The company’s move comes after a new partnership with OpenAI and increasing global demand for memory chips, thanks to the AI boom. It recently increased its investment in the project to 4.2 trillion won (about $3 billion), according to a report from Korea Joongang Daily.

Samsung accelerates P4 facility construction to meet growing AI chip demand

Samsung resumed the construction of the P4 facility in July after a delay of over 1 year (due to a slowdown in the semiconductor market). Now, the company is working to speed up progress by increasing its investment and pushing for an earlier completion date. The new funding represents a 50% jump from the contract cost announced in July. This could allow the firm to move the target completion date by three months to April 2027.

The P4 complex is divided into four phases. Phase 1 produces both NAND flash and DRAM memory chips. Phases 2 and 4 mainly focus on 6th-generation high-bandwidth memory products (HBM4). There’s also chatter that Samsung is planning a new P5 facility to further expand its production capacity at the Pyeongtaek semiconductor hub.

“Orders from major customers such as Nvidia, AMD, and Broadcom are surging simultaneously,” said KB Securities analyst Kim Dong-won. “Starting next year, we expect shortages and price hikes in general DRAM, which will narrow the profitability gap between HBM and traditional memory faster than anticipated.”

Meanwhile, Samsung is a key supplier to OpenAI’s $500 billion Stargate project, which aims to make 20 large-scale AI data centers in the US by 2029. Samsung and SK Hynix will provide about 900,000 high-performance DRAM wafers per month. This could exceed the demand for HBM, which may reach 1 million units per month. This year, global production capacity may reach only 400,000 units per month. As a result, Samsung is recalibrating its production roadmap to keep up with this explosive growth.