Shulou(Shulou.com)05/31 Report--

Although spot memory prices rose 23% last week, a report from research firm Geithner shows that the global semiconductor market will continue to cool this year, with an output value of only $429 billion, down 9.6% year-on-year. Main memory chip prices have fallen 42 percent and the glut will continue into the second quarter of next year. Under this trend, some manufacturers 'investment will also adjust accordingly. In March, Samsung said it would not reduce investment because of the market downturn. As a result, Samsung changed its original intention in less than four months, and the Pyeongtaek P2 plant, which was scheduled to start production at the end of this year, was postponed until Q3 to Q4 next year.

From 2017 to 2018, Samsung spent 30 trillion won (about 25.4 billion US dollars) to build the world's largest memory chip factory in Pyeongtaek, South Korea, namely Pyeongtaek P1 project. The first layer mainly produces NAND flash memory, and the second layer mainly produces DRAM memory, with monthly production capacity of 100,000 and 200,000 respectively.

Following the Pyeongtaek P1 plant, Samsung also plans to build the Pyeongtaek P2 plant by the end of this year. To this end, Samsung acquired 2.89 million square meters of land, equivalent to 400 football fields. The local power company built a 200 MW facility for this purpose.

The Pyeongtaek P2 plant also has an investment of 30 trillion won, mainly producing DRAM memory chips with a monthly production capacity of 300,000 pieces. It was originally planned to start equipment installation in Q3 this year and put into production by the end of the year. However, South Korean media reported that Samsung postponed the production plan of Pyeongtaek P2 plant, only maintained the necessary equipment this year, and will install it in Q1 next year.

According to the normal steps of the fab, it takes a lot of time to complete the installation and commissioning of the equipment. The real mass production time of memory chips in Pyeongtaek P2 factory is Q3 or Q4 next year, almost a year later than now.

The reasons why Samsung delayed such a huge investment project are very complicated. Recently, export controls on three important raw materials have also been a factor. If Samsung cannot obtain stable photoresist, hydrogen fluoride and other materials, the production of memory chips will be affected.

Then there are global trade disputes, which also affect the global economy and cause demand to fall.

But basically Samsung has postponed the Pyeongtaek P2 plant investment plan or memory prices are too low. Samsung's profit fell 50% in the first two quarters of the year as memory prices fell. Now that such a large memory factory is back in production, the problem of overcapacity will only get worse.

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