Due to the Trade War Between Japan and South Korea, Samsung Pyeongtaek Factory Investment Delayed

Source:   Editor: admin Update Time :2019-08-03

Owing to the weak market, trade disputes between China and America and conflicts between Japan and South Korea, Samsung begins to adjust the investment plan and postpone the equipment investment of the memory semiconductor Pyeongtaek Factory P2 to next year.

According to the South Korea technology media etnews, many related people said that due to the weak memory market and uncertainties increased in trade conflict between Japan and South Korea, South Korea technology giant Samsung had already decided to postpone the investment plan, P2 memory production line construction in Pyeongtaek in the second half of 2019, to the first quarter of next year.

It is reported that Samsung is postponing the investment plan of Pyeongtaek P2 factory, which includes the fact that Samsung will postpone the order of Machine procurement from the second half of 2019 to the first quarter of 2020, thus resulting in delaying Samsung's desire of becoming the world's memory giant, which it had invested in since 2018.

From the beginning of last year, Samsung had begun to build the memory foundry P2, which aimed at surpassing the world's largest Pyeongtaek first factory P1. In fact, last year, after the end of the semiconductor industry boom in the second half of last year, the P2 investment plan covering semiconductor equipment and raw materials was highly anticipated by the industry, but Samsung Electronics retained its investment plan and the prospects of the upstream industry were dimmed again.

Some related people said that owing to the weak memory industry, the order of P2 equipment reserved in the second half of year has delayed to the beginning of next year. Other related people have also confirmed that Samsung Electronics plans to delay the order of P2 equipment to the first quarter of next year. At present, only the equipment for maintenance is reserved and the minimum investment is made.

In order to cope with the changing market of semiconductor, since 2010, Samsung Electronics has adopted the investment strategy of establishing factory at the first. Generally speaking, Samsung Electronics will establish clean room, introduce related equipment and then put into production, which is also adopted by P2.

People used to anticipate that Samsung Electronics would accomplish the establishment of P2 factory and order related equipment. However, the semiconductor market has not refreshed. So Samsung Electronics starts to adjust the investment rate. According to the related analysts of semiconductor industry, although the price of memory such as NAND flash has begun to bounce recently, the demands have not refreshed, which is the outcome resulting from Japan’s restrictions on export. Samsung Electronics decided to delay the investment because the market demands have not refreshed.

According to further report, some people pointed out that the main reason why Samsung decided to adjust Pyeongtaek factory P2 is that in addition to the number of inventory of memory on the client side, in the first half of year, there are still three to four months inventory and the trade war between Japan and South Korea and other many uncertainties, thus making Samsung had to adjust.

Some related people emphasize that the increased quotation of memory results in the trade conflict between Japan and South Korea and market expectations. However, this message is bad for Samsung because Samsung is unlikely to provide supply in time, thus resulting from the shortage of memory, which makes Samsung worried.

Etnews also points out that the reasons why Samsung decided to delay the investment are that since the first half of year, there are still many inventories of South Korean memory makers and many uncertainties owing to the trade war between China and America and the Japan’s export restriction to South Korea. Some semiconductor makers point out that although Samsung is expected to delay the investment in the Pyeongtaek P2 production line in the second half of 2019 to the first quarter of 2020, it does not rule out that this investment will continue to be postponed. Because Japan is likely to further expand the control products owing to the Japan-Korea trade dispute, which will have an impact on Samsung's production and make the original investment plan have to be postponed again.

Schematic diagram (photo source: unsplash)


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