Technology giant Samsung Electronics on Tuesday unveiled a $1.2 billion plan for upgrading South Korean chip facilities to cut costs in the face of a stubborn downturn in the semiconductor industry. The world"s top memory chip maker will invest $1.2 billion on equipment to produce memory chips using next generation 12-inch wafers, the company said in a filing.
A 12-inch (300 mm) wafer can yield more than twice as many chips as an 8-inch wafer, the current industry standard, helping chip makers save production costs in the highly cyclical sector.
"The decision implies Samsung maintains a bullish outlook for the second half of 2003 as it has been more cautious and slower than rivals like Infineon in introducing the next-generation facilities," said Simon Woo, an analyst at Hyundai Securities.
Samsung, currently the only profitable memory chipmaker in the world, had fallen behind in introducing 12-inch lines, even as a record plunge in memory chip prices last year forced the industry to cut costs and seek partnerships. German chip maker Infineon Technologies and Taiwan"s Nanya Technologies said in November they would jointly build a similar wafer plant.