Samsung has recently posted record-high operating profit margins from its chip division due to soaring demand for its chips from data centers and consumers alike, and to help keep with this demand the company is planning to build a brand-new, US-based chip fabrication factory. Even with this new chip fab in play, Samsung is still expecting the chip shortage to last until at least 2028, perhaps longer. This is a sentiment shared by other companies in the space, including SK Hynix.
Demand has risen sky-high for chip and memory products in recent months, which has led to increased prices for just about anything that contains those components. The demand doesn’t seem to be slowing down, so Samsung is determined to at least ease some of that tension by building this new factory. The chip fab is going to be built on Samsung’s Taylor, Texas campus, so the company won’t have to break ground on a completely new site.
Samsung says it will start building its new US chip fab before the end of 2026
Samsung expects to start building this new fab before the end of 2026, and it’s anticipating the fab being capable of mass production by 2030. Due to increased demand of chips from US-based companies and data centers requesting multi-year contracts, Samsung says this US chip fab is necessary for it to meet the demand.
It’s also Samsung’s second fab at the Taylor, Texas campus. Amidst the demand for its chips, Samsung confirms it posted record-breaking operating profits for its chip division in its most recent quarter. However, this success has also led to losses for its mobile division. Samsung, along with more than a few other companies, have raised prices on phones and other consumer electronics as the cost of manufacturing components went up. This increase in prices for components led to lower profit margins on devices, despite increased sales.
Samsung isn’t the only chip company raising prices. Qualcomm earlier on July 30 confirmed increased prices for chips, following a report from the previous week that it was sending letters to customers informing them of this change.
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