Samsung Electronics Breaks Ground in Earnest on Its Last Pyeongtaek Semiconductor Fab

Samsung Electronics has begun preparations to break ground on "P5 Fab 2," the final fab at its Pyeongtaek campus in Gyeonggi Province. As a wave of artificial intelligence (AI) infrastructure investment has driven a surge in memory chip orders, the company has moved up the timing of its capital investment by roughly six months from the original plan.
Construction Equipment Deployed at the P5 Fab 2 Site
According to the industry on the 21st, several pile drivers have recently been newly positioned at Samsung Electronics' P5 Fab 2 site. A pile driver is a piece of construction equipment used to drive columns into the ground. An industry official said, "Equipment coming into the construction site one by one means that P5 Fab 2 construction will begin in earnest before long," adding, "There is a strong likelihood of breaking ground around next month." The containers on the fab site are being moved elsewhere. The site partitioning work has reportedly also been completed. Samsung Electronics and the construction contractor are said to be assembling a dedicated team for the P5 Fab 2 project.
P5 Fab 2 is the sixth fab to be built at the Pyeongtaek site, where Samsung Electronics produces its most advanced chips. It is also the last semiconductor production line at the Pyeongtaek site. The fab will be built on a site measuring 661m by 194m (approximately 130,000 square meters). That is the size of 18 soccer fields. It is expected to be able to produce 200,000 to 300,000 wafers per month on a 300mm wafer basis. It will house everything from high bandwidth memory (HBM), its flagship product, to next generation DRAM, NAND flash, and advanced process foundry (contract manufacturing) lines. The target is for it to begin operation for the first time in 2029.
A distinctive feature is that it will be built in a three story "triple fab" structure. This building structure was first adopted at "P5 Fab 1," located right next to this site, which began construction late last year with a target of beginning operation in 2028. P5 Fab 1 is expected to require an investment of more than 60 trillion won. A similar amount of funding is forecast to go into building P5 Fab 2. Combining the production capacity of P5 Fabs 1 and 2 comes to around 600,000 wafers per month on a 300mm wafer basis. That is a scale comparable to Samsung Electronics' current total DRAM output (650,000 units per month).
Accelerating Capital Investment Amid Surging Chip Demand
Samsung Electronics had originally planned to break ground on P5 Fab 2 early next year. However, as demand recently surged in the information technology (IT) industry not only for HBM, the core of AI chips, but also for general purpose DRAM and NAND flash, the company decided to move up the groundbreaking timing. An industry official said, "Once Samsung Electronics begins pouring out volume in earnest, it will be able to gain an edge over competitors in cost competitiveness through 'economies of scale.'"
The fact that global big tech companies have recently approached Samsung Electronics' foundry one after another about collaboration is also one of the factors behind moving up the groundbreaking. Chip design companies such as Nvidia, AMD, and Qualcomm, as well as Tesla and Neuralink led by Elon Musk, have all proposed contract manufacturing to Samsung Electronics.
In addition to building P5 Fabs 1 and 2 simultaneously, Samsung Electronics is expanding the production capacity of each of its bases in various ways. At P4, the newest fab within the Pyeongtaek site, it is additionally building a 10nm class 6th generation (1c) DRAM production line for 6th generation HBM (HBM4) with a scale of 100,000 to 120,000 wafers per month on a 300mm wafer basis. Its Xian fab in China is being equipped with space to produce 286 layer (V9) NAND flash. Its fab in Taylor, Texas, in the United States is being equipped with a 2 nanometer (nm; 1nm = one billionth of a meter) manufacturing line capable of making Tesla AI chips. The company is also reportedly pursuing the establishment of a semiconductor back end (packaging) fab in the Gwangju or Saemangeum region in a bid to promote balanced regional development.
Daniel Oh, Executive Vice President at Samsung Electronics, said at the first quarter earnings call held this past April, "With AI demand continuing this year, we plan to expand the scale of our capital expenditure (CAPEX) to a considerable level compared with the previous year," adding, "We will strengthen our strategic bases and secure additional infrastructure so that we can proactively respond to future demand."