South Korea’s chipmaker Samsung Electronics Co. on Thursday announced possibly $8 billion investment to expand its on-demand chip-making capacity by adding a sixth production line at its foundry base in Pyeongtaek, Gyeonggi Province.

The world`s largest memory chipmaker chasing pure play foundry Taiwan Semiconductor Manufacturing Co. (TSMC) who is ahead by a 30 percent in the contract chip market, will employ extreme ultra violet (EUV) solutions to turn out chips at 5-nanometer in the new line to be in full operation in the second half of 2021.

The latest investment is a part of Samsung Electronics’ “Semiconductor Vision 2030” announced by its vice chairman and de factor head Jay Y. Lee in April, last year. The vision is aimed at becoming world’s No. 1 system semiconductor manufacturer with total investment of 133 trillion won ($108 billion) by 2030.

In February, Samsung Electronics added a new EUV-based 7-nanometer line in Hwaseong, Gyeonggi Province.

The company did not announce further details, but the latest addition is estimated to require spending of around 10 trillion won, given the EUV and 5-nanometer costs.

The expansion follows the announcement by TSMC, dominant leader in contract chip market with a 50 percent share, to build a 5-nanometer factory in U.S. state of Arizona at a cost of $12 billion.

Samsung currently has five foundry production lines at home – two in Giheung, Gyeonggi Province, and three in Hwaseong – as well as one in Austin, the United States. The foundry line in Pyeongtaek that will begin operations in 2021 will be the company’s seventh production line and the second on EUV solutions.

EUV exposure technology is one that engraves chip circuit in wafers through short wavelength extreme ultraviolet light source. The technology realizes ultrafine circuits, which was impossible using existing technology. It is considered an essential technology to produce high-performing, low-power chips and next-generation luminous source that can replace existing argon fluoride.

“The new production facility will expand Samsung’s manufacturing capabilities for sub-5nm process and enable us to rapidly respond to the increasing demand for EUV-based solutions,” said Jung Eun-seung, president and head of foundry business at Samsung Electronics.

Samsung Electronics has been expanding investment in its foundry production facilities.

Last year, the company began mass production of EUV-based 7-nano process at its S3 Line in Hwaseong, becoming the first in the industry. Samsung Electronics expanded ultrafine processing production through its V1 line in Hwaseong.

The latest investment in Pyeongtaek line will allow the company to increase production of 7 nanometer and under ultrafine processed products.

Samsung Electronics plans to mass produce 5 nanometer products in the second half of this year in Hwaseong before adding more production at its new foundry line in Pyeongtaek. The 5- nanometer process technology is currently the most difficult processing technology that is in competition between Samsung Electronics and TSMC.

The Korean company is currently seeking to develop 3 nanometer process technology that maximizes productivity with an aim to begin 3-nanometer based products in 2022.

Shares of Samsung Electronics dipped 0.1 percent to close Thursday at 49,950 won.

By Lee Eun-joo

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