Samsung to expand U.S. fab in logic push

Amid a major capital spending program, South Korea's Samsung Electronics Co. Ltd. plans to expand the capacity of its 300-mm fab in Austin, Texas with a $3.6 billion investment. At the same time, Samsung has opened an R&D center in Austin. The expanded fab will now produce logic devices for Samsung's System LSI business. Previously, the Austin plant only made NAND flash memory chips. The production of those chips will continue. The company will also hire an additional 500 employees as a result of the expansion. Samsung continues to make a big push in logic, but for the most part, the company has seen modest results at best. The chip maker produces CMOS image sensors, system-on-chip devices and other products. Much of the company's logic capacity is geared for its own branded products, including cell phones. The company has obtained a major SoC design win for Apple Inc.'s iPhone and iPad. Last year, however, a Samsung executive warned that his own company is still too dependent on the memory business, saying it must seek new markets to fuel future growth. Samsung itself has taken steps into many non-memory markets, including a move to re-enter the power IC sector, but the chip giant continues to struggle in many of those markets. Meanwhile, the fab expansion in Austin has been somewhat expected. In 1997, Samsung opened its 200-mm DRAM factory in Austin. In 2007, Samsung opened a 1.6-million-square-foot 300-mm NAND flash memory wafer plant in Austin. Last year, Samsung closed the 200-mm fab--a move that impacted 500 jobs. At the time, it planned to upgrade the 200-mm plant into a 300-mm fab. The investment in the Austin campus will build out the second phase of the company's 2.3-million-square-foot semiconductor complex. The new facility, which is dedicated to front-end fabrication of advanced 45-nm logic process technology and beyond, is expected to be completed by the end of 2011. Equipment move-in and build-out of the clean room will begin almost immediately. "We expect that the facility will be operational by the second quarter of next year," said W. S. Han, president of the unit, Samsung Austin Semiconductor, in a statement. In another move to boost its logic efforts, the company in March established Samsung Austin Semiconductor Research Center (SARC), which will concentrate on the design of logic chips. The center's director is Keith Hawkins, a veteran semiconductor researcher, who was senior director of design engineering-microelectronics at Sun Microsystems in Austin prior to joining Samsung. SARC will employ about 50 researchers by the end of 2010. Employment at the Austin site is expected to grow from 1,000 employees to about 1,500 by 2011. The annual payroll in Austin will grow from its current $70 million to about $105 million. Last month, Samsung in total announced that it would double its capital spending to boost its capacity in semiconductor and flat-panel display manufacturing. Samsung said it would spend 18 trillion won (about $15.7 billion) in 2010. A further 8 trillion won ($7 billion) would be spent on R&D. With the investment in new manufacturing lines, Samsung expects to hire 10,000 new employees in 2010, including 3,000 for the semiconductor business and 4,000 for the LCD business. Samsung recently posted record operating profit on strong first quarter sales growth driven by its components business, especially semiconductors.