Samsung to soothe semiconductor drought with new Pyeongtaek production line

Chaebol's Q1 revenue reaches new all-time high of US$59bn

Samsung has vowed to maximize its silicon production by starting mass production of 5nm and 7nm products at its Pyeongtaek production line in the second half of 2021.

The Korean giant revealed its plans during its Q1 earnings call on Thursday.

Vice president of the foundry division, Han Seung-hoon said Pyeongtaek Line 2 would be ready for mass production in the second half of 2021, adding:

In the second half, we expect growth in the foundry market to exceed previous projections due to rising demand from accelerating 5G penetration, a continuation of the work from home trend, resumption of corporate IT investments, and growing demand from customers securing safety stock.

We plan to respond to increasing customer demand through active supply expansions centering on advanced processes by a full operation of Pyeongtaek Line 2, but we will strive to secure the basis for future growth by expanding our global customer bases and by diversifying within the applications such as HPC network, automotive and others.

The plans for a second manufacturing line comes after severe rolling blackouts caused Samsung to shutdown its Austin, Texas manufacturing plant in February.

The shutdown had an effect on Q1 profits, said Han adding:

In the second quarter, we fully normalized the production line in Austin, and we will try to improve profitability and sales by flexibly managing our product mix and using pricing strategies to secure future investment resources.

The unscheduled manufacturing shutdown unfortunately occurred in the midst of a global semiconductor drought that has left consumer electronics, automobiles and other industries scrambling for chips.

Han JinMan, senior vice president of the foundry marketing team said 71,000 wafers were affected by the Austin shutdown, valued at between 300bn won (US$270m) and 400bn won (US$360m). The Austin fab is now operating normally again.

Also on the call, Samsung reported an increase in total revenue by 6.2 per cent quarter-on-quarter to a new all-time Q1 high of 65.4tr won (US$59bn). Year-on-year revenue increased by 18.2 per cent. Quarter-on-quarter operating profit increased 3.7 per cent to 9.3tr won (US$8.4bn).

The results were driven by smartphone sales with the help of tablets, PCs, wearables, and the easing of repressed refresh cycles for consumer electronics. ®