Samsung Invests $4 Billion in Texas Semiconductor Plant

Samsung Electronics Co, the world’s largest maker of memory chips, said it will invest about $4 billion in its Texas factory to boost output of processors increasingly used in smartphones and tablet computers, Bloomberg reports.

The investment will help convert the production of memory chips to logic products, including processors that power mobile devices, at the Austin, TX plant, Samsung said in a statement today. The Suwon, South Korea-based company plans to complete the conversion and start mass production in the second half of 2013.

Samsung is shifting away from chips used to hold memory in personal computers and digital gadgets to more complicated, yet lucrative processors acting as the brains of devices. As the exclusive manufacturer of Apple Inc.-designed chips running the iPhone and iPad, Samsung has benefitted from the popularity of the U.S. rival’s devices and its own Galaxy phones that together control more than half the global smartphone market.

“It’s the right move to concentrate on the non-memory business because it’s much more profitable,” Choi Do Yeon, a Seoul-based analyst at LIG Investment & Securities Co., told Bloomberg. “The market for mobile application-processors is getting big, and Samsung is having a hard time keeping up with demand. They need extra capacity.”

Samsung, which plans to spend $13 billion on its global semiconductor business this year, had added another production line dedicated to logic chips at the Austin plant and began full operations in October.

With the new investment, the largest in size to be made by a foreign company in Texas, Samsung’s spending on the factory since 1996 will exceed $13 billion, according to the statement. About 2,500 construction workers and equipment vendors will be hired for the project, it said.

In April, Samsung announced it will spend $7 billion building a semiconductor factory in China to satisfy growing demand for mobile devices. The initial investment in that project was $2.3 billion.