Samsung Electronics is considering building a second chip factory in Korea, Yonhap News Agency reported Tuesday, citing industry sources close to the company. The plan that has supposedly been under review for months still hasn’t been greenlit, with the firm’s management deliberating over building a chip production line in Pyeongtaek, a city 70 kilometers (43 miles) south of its hometown of Seoul. It’s presently unclear when the tech giant might reach a final decision on the matter but its main point of concern that prevented a swifter decision is understood to be the uncertainty in regards to the global state of the semiconductor market. The rising demand for such offerings led the firm to extreme highs over the course of 2017, allowing it to post consecutive record-breaking profits despite a major leadership crisis, yet most analysts are highly skeptical such a state of affairs will continue in the medium term.
With more chipmakers now ramping up their production capacities to compete with Samsung and the demand showing signs of dropping off on its own going forward, the market may not be nearly as profitable in the near future to warrant another significant investment in a major production line. For much the same reasons, the company is presently understood to be having second thoughts about pouring billions of dollars into the OLED industry, being skeptical about its returns. The size of the potential second chipmaking facility in Pyeongtaek remains unclear, as does the approximate value of the investment. The first factory in the area started operating just over half a year ago, having begun production last July.
Samsung Vice Chairman Yoon Boo-keun recently signaled a decision on the matter may be reached in the immediate future, local media reports, speculating that all of the tech giant‘s M&A deliberations may be significantly accelerated following the release of its heir apparent Jay Y. Lee who was freed earlier this week after spending nearly a year in detention on charges of corruption and bribery. While first sentenced to five years in prison by the Seoul Central District Court, Mr. Lee had his term halved and suspended by the Seoul High Court on Monday. He’s been placed on a four-year probation period and has yet to clarify whether he intends to immediately return to Samsung in an official capacity, though Mr. Yoon’s recent remarks are indicative of that scenario.