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Samsung Electronics is sharply increasing their investments into semiconductor production and R&D in China. Domestic electronics firms like Hynix and Orion Electronics are pushing plans to move their entire LCD and PDP productions lines to the country.
With even Samsung Electronics now moving some of its core semiconductor R&D and production facilities to China, huge changes are being predicted for the domestic electronics industry.
The expansion of Samsung's electronics industry in China centers around the city of Suzhou, 90 kilometers northwest of Shanghai. About 23 million pyeong (one pyeong is 3.3 square meters), nine of the world's largest IT firms have set up shop, with Samsung being the first to enter in 1994.
On Friday, ceremonies attended by 300 people, including Suzhou Party Secretary Wang Min, Suzhao Mayor Yang Weize, and the president of Samsung Semiconductor, Lee Yoon-woo, were held to mark the completion of a three-production-line plant that makes memory chips and the selection of a site for a semiconductor research center. Including the new sites, Samsung has now acquired R&D centers, production lines, and sales distributors for the Chinese semiconductor market.
Products such as high-capacity DRAM, with over 256 megabytes, flash memory chips and SRAM (static random access memory) drives are being produced at the firm’s Suzhou plant. Samsung aims to produce 40 million semiconductors a month at the Suzhou plant alone.
Samsung's semiconductor sales in China are expected to triple by 2006, from this year's US$1.6 billion dollars.
As the production capacity of plants in China increases, production at Korea's only semiconductor assembly line in Onsan decrease proportionally.
Semiconductor research in China is expected to pick up speed as well. Samsung Electronics has built a semiconductor R&D center in Suzhou, and plans to establish a second one in Hangzhao, near Shanghai, around the beginning of next year.
Samsung is already preparing a huge industrial park in Suzhou. Since 1996, a plant for the production of DRAM and flash memory chips and a plant for the production of non-memory systems, such as LSI, have been in full operation in the city. Moreover, since last July, production of LCD modules at a plant near Suzhou has been in full gear, and a laptop computer production facility is also planned for the area.
In another area of Suzhou, the firm is manufacturing home appliances, such as refrigerators and air conditioners. Including home appliances, Samsung's sales to the Chinese market have already surpassed US$5 billion this year. It also has 11 business branches in China alone.
Lee Yoon-woo said he is confident that the expansion of his company in China would mark the second stage of its semiconductor and LCD industries' take-off.
(Yi In-yul, yiyul@chosun.com )
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