Samsung Electronics virtually shelved its send phase investment in its semiconductor plant in Xian, China. It seems that the Korean electronics giant is concerned about a sharp rise in supply due to the expansion of NAND flash plants by Toshiba, SanDisk and Intel with the memory semiconductor market forecast to have the worst market situation in seven years this year.
According to the semiconductor industry on February 3, Samsung Electronics postponed the second phase investment in the Xian plant to some time in 2016 or beyond. Samsung Electronics currently using about one fifth of the whole area (about 1.1 million square meters) of the Xian plant already reached its maximum production capacity with its current equipment. This situation compelled industrial experts to predict that the company will execute its second phase investment in the remaining site within this year.
The Xian plant which began to operate in 2014 is the core production base for “V NAND,” a 3D NAND flash of Samsung Electronics. According to some industrial sources, the plant is processing up to 100,000 wafers a month although less than two years have passed since the start of its operation. The production volume is well over 60,000 to 70,000 units which were originally forecast.
It is said that Toshiba and SanDisk’s massive expansion of NAND flash production lines gave Samsung Electronics burdens in enforcing the second phase investment. Toshiba will build a 3D NAND production base by investing 500 billion yen in concert with SanDisk and put the base into operation in 2017. At the same time, Intel and Micron will begin to mass-produce 3D NAND flashes. There is a concern that if Samsung begins to invest in the second phase investment, too, the NAND flash market will get mired in extreme supply competition. This concern made Samsung Electronics think again.
Toshiba’s expansion into the market is the biggest burden to Samsung as Toshiba and Samsung share the NAND flash market and Toshiba has the most stable mass-production structure,” a semiconductor industry expert said. “Although Samsung does not take Intel’s and Micron’s NAND flash plants too seriously, the company is concerned about a possibility that the two will take China’s demand for next-generation data centers.”