South Korea. Top memory-chip maker and IT giant Samsung Electronics announced Monday that it will be investing 15.6 trillion won (roughly $14.7 billion) to build a new plant focusing on semiconductors production - the company's long time business which brings in steady profits, in response to the challenges the company has been going through in the mobile market shares the last few months.
Samsung's position in the mobile industry has been a struggle especially with the brand new releases of Apple iPhones introducing bigger screens and the Chinese Electronics company Xiaomi's strategy of selling low-cost mobile devices in other countries. Apple released 2 iPhones just the past month while Xiaomi sold 60,000 handsets online in India in just 13.9 seconds. (You can read more of the Xiaomi success here)
Samsung will be expanding its Godeok Industrial Complex, Pyeongtaek, a Gyeonggi province, south of Seoul, by choosing it to be the location of the new chip plant. Construction on the 790,000m2 site will begin first half of next year and eyes to finish and start operations by the second half of 2017. With the ever-increasing demand for mobile devices (phones, tablets, even portable computers), the South Korean company sees huge profits coming in because of increase for mobile chip orders. While company has yet to decide which chip to make, either memory or logic chips, they are sure that its semiconductor division will boost profits for the coming years.
During the 2nd quarter, Samsung experienced a 25% year decline in operating profits due to the struggle in the mobile phone industry as competition got tighter because of thriving companies such as Xiaomi. But just last quarter, Samsung's profit from its chip division skyrocketed at 2.14 trillion won (about $2 billion) partly because of supplying semiconductors to Apple's new iPhones. Samsung has been the sole supplier of Apple's A7 processor, which powered the iPhone 5s.
