Samsung plans to build NAND flash fab in China

The new facility would help Samsung meet growing flash demand from by smart phone and media tablet manufacturers

12/07/2011

The NAND flash memory market will grow to $44 billion by 2015.Samsung Electronics has announced it plans to build a $4 billion fab in China that will build NAND flash memory chips.

In a statement, Jun Dong-Soo, president of Samsung's memory IC business, said the new 20 nm fab would enable Samsung to meet “fast growing demand from our customers and, at the same time, strengthen our overall competitiveness in the memory industry."

If built, the fab would be the company’s second plant outside of Korea and its first in China. Samsung’s other offshore fab is in Austin, Texas.

Samsung has filed an application with the South Korean government to proceed with its plans for the fab in China. South Korea requires companies to make such requests because the government is concerned that Korea's technology industry might be damaged by locating a high technology fab outside of the country.

Samsung hopes to have the new fab in China producing and flash chips in 2013.

The fab would increase worldwide NAND capacity to a degree, according to Brian Matas, vice president of research for IC Insights, a semiconductor researcher firm based in Scottsdale, Ariz.

“If Samsung builds the fab, it will surely boost NAND capacity, but it won’t create an overcapacity situation,” Matas said. “Demand for NAND flash in China and around the world is expected to continue expanding due to the increase of flash in applications like smart phones and tablet PCs.”

NAND flash is used in a variety of devices including smart phones, media tablets, digital music players, and portable USB devices. Samsung owns about 40 percent of the NAND market and competes with Hynix, Micron and Toshiba, among others.

In 2011, the NAND flash memory market will amount to $24.4 billion, up 13 percent from $22.4 billion the industry posted in 2010, according to researcher IC Insights. Double-digit growth for NAND will continue through at least 2015. In 2012, the NAND flash market will grow 14 percent to $28.9 billion and then 11 percent in 2013 when the NAND market will total $32.1 billion, IC Insights reported.

By 2015, the NAND flash market will grow to $44.4 billion. While there will be strong revenue and unit growth for flash, prices will decline. The average price of a NAND flash chip will fall from $3.81 in 2011 to $3.21 in 2015, according to IC Insights.