Samsung Heavy Reliance On China’s Semiconductors and Display Business.
Samsung Electronics has been eyeballing China recently for its semiconductors production display panel and supplies in search for a much more low cost advantage.
As of recently, The world’s number one memory chip maker announced that it’s begun a full-scale semiconductor manufacturing operations based in China’s Xi’an fab. The new facility will manufacture Samsung advanced NAND flash memory chips or 3D V-NAND.
By commencing operations of its Xi’am fabrication line, Samsung has managed to secure themselves a solid memory productions based within China, a market where an estimation of up to 50 percent of global NAND flash are generated by production bases operated by many IT companies in China. It’s also gone on to lay the foundation for a more stable supply of memory products for its customers.
Samsung has planned to complete construction of its entire Xi’an complex, including an assembly facility and test line, by the end of this year. An spokesperson from Samsung stated:
“The production yield of Xi’an factory rose to a similar level of Korean fabrication lines, faster than our expectations. Although it seems to be the results of deploying many Korean technical staff, it is a meaningful achievement as it is made of Xi’an’s electricity and water.”
“Most of all, the quality of electricity and water, core parts of semiconductor production, is good in Xi’an. Selecting Xi’an as semiconductor manufacturing base was an excellent choice for us,” the official added.
The construction of the production line from China seemed to reduce production cost during this situation where it creates more than 80 percent of revenue from overseas. Samsung can also save transportation cost if it produces from overseas.
During the time, Samsung Electronics has quickly increased purchases of display panels form BOE, China’s biggest display panel manufacturer.Market watchers have attributed this increase to Samsung’s expanded production of low-end smartphones.