Korean devices vendor Samsung Electronics is planning to invest $14.7 billion to set up a new chip production plant in South Korea.
A Reuters report says that this development will be a major bet on its semiconductor business amid a smartphone earnings slump.
Samsung, the world’s biggest memory chip maker, said the new plant will boost its competitiveness in the semiconductor industry, which it is showing steady growth due to increased demand from mobile devices.
The plant will make either logic or memory chips, Samsung said, adding that a final decision on products had not been made yet. The firm said its chip production capacity was expected to increase by a low double digit percentage.
The plant will be located in Pyeongtaek, a city roughly 75 kilometres south of Seoul and construction is scheduled to be completed by the second half of 2017.
Profits for company’s key smartphone business are slipping rapidly as Apple grabs the lion’s share of profits at the high end of the market and Chinese makers of cheap and feature-rich smartphones, like Lenovo and Xiaomi, erode margins at the low end.