Samsung Electric Co Ltd announced on Nov. 1, Tuesday that it wants to boost the company's mobile chip manufacturing unit in Samsung Austin Semiconductor LLC (SAS), Texas, with an investment of over $1 billion in view to meet the increasing demand. Clearly, the South Korean tech titan is working hard to overcome the chaos over the Galaxy Note 7 recall.
The new investment would be utilized to ramp up the production of semiconductors for mobile as well as other devices, Samsung said in a statement. The production is expected to commence from early 2017. "Investments in its facilities will enhance current System LSI production to meet the growing demands in the industry for advanced system-on-chip (SoC) products especially for mobile and other electronic devices," the company said.
Samsung's investment plan comes in the wake of the tech giant's announcement last week that the company will raise the capital expenditure to a record of 27 trillion won ($24 billion) for 2016. Of this, 13.2 trillion won will be set aside for the company's semiconductor business.
Currently, Samsung is the second largest chip manufacturer globally, next to Intel. Since the memory chip sales contribute largely to the company profits from semiconductor business, Samsung has been endeavoring to increase its earnings from other products like its patented Exynos mobile processors, Reuters reported. The company has also focused on boosting its revenue from contract manufacturing deals with clients like Nivida Corp. and Qualcomm Inc.
However, the Korean tech giant did not offer further details related to the company's investment plans in its Austin facility, especially what would be the precise enhanced capacity of the plant. However, Samsung quoted an Impact Data Source Economic Impact Study, saying SAS contributed $3.6 billion into central Texas' regional economy in 2015.
During this period, SAS supported 10,755 jobs in the area and paid $498 million in salaries annually. Moreover, since the SAS was established in 1997, Samsung has invested over $16 billion towards the expansion as well as maintenance of its Austin facility.
Although most of Samsung's production is from its facilities in South Korea, the company established the Austin factory with a view to make NAND flash chips. The facility was started with an investment of $3.5 billion. Currently, the Austin facility has 3,000 workers and Samsung is also to hire additional 500 workers since it plans to boost production to meet the growing need for electronic as well as mobile devices.
Watch the video on Samsung's plans for setting up a gigantic chip factory below: