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Samsung to Spend $500 Million on Texas Chip Plant
 05/02/2003 SAN FRANCISCO (Reuters) - Samsung Electronics Co. Ltd. on Friday said it was spending $500 million to expand and upgrade its semiconductor plant in Austin, Texas, to make advanced computer memory chips used in high-end servers. Samsung's expansion comes at a time when other chipmakers have been cutting back on spending, including the world's biggest chip company, Intel Corp., which has said it plans to cut its 2003 capital spending budget by as much as 25 percent. The chip industry is in an extended downturn, its worst ever, as corporate spending and computer upgrades are being delayed amid an overall economic slump. Samsung's Austin plant currently produces 128 megabit and 256 megabit DRAM (dynamic random access memory) chips used in personal computers and servers. After the expansion, the plant will produce state-of-the-art nanotechnology semiconductors, including 1-gigabit memory chips used in high-end servers. A 1-gigabit memory chip can store roughly 20 million words, or about four times more than a 256-megabit chip. Reducing the size of the chips and its components allows chipmakers to make more of them, with more features, without spending more money, in the long run. Most of the money, more than $400 million, will be used to upgrade chipmaking equipment, and the rest will be used to increase the size of the 660,000-square-foot plant by 40,000 square feet. The plant will also hire about 300 more workers, for a total of 930, over the next three years, said Sung W. Lee, president of Samsung Austin Semiconductor. The plant represents about 10 percent of the company's chip-making capacity and is the only Samsung semiconductor plant outside of South Korea. The investment is the biggest industrial investment in Austin since Samsung built the $1.4 billion plant there in 1996 and the second largest foreign investment in Texas in two years, according to Samsung. Since 2000, Austin has seen the number of semiconductor fabrication plants located in the area drop from 12 to 5, Samsung said. In April, Gartner Group forecast global spending on semiconductor manufacturing tools and equipment would grow more than 7 percent in 2003 after falling 37 percent last year. An increase in capital spending by chipmakers could indicate a rebound for the industry. News Archive | |
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