Samsung building new flash-memory facility

Samsung Electronics today signed off on plans to invest $615.4 million to build a new memory-chip production facility to meet rising demand for NAND flash memory--the same memory used in Apple's iPod nano and iPod shuffle digital music players--as well as DRAM. Earlier this month, top executives vowed to more than double sales and obtain top global market share in 20 products by 2010, according to a report from the Associated Press. In mid October Apple dropped a joint investment plan with Samsung worth $3.8 billion that covered flash memory chips used in Apple's music player devices, however Apple backed out of the deal in favor of another chip maker. This month, news surfaced that Samsung was expected to sign a long-term contract with Apple worth several hundred million dollars, and today Apple announced long-term agreements with Hynix, Intel, Micron, Samsung Electronics and Toshiba to secure the supply of NAND flash memory through 2010. [updated]

The new facility is expected to open in the first half of 2006, and will be based in Hwaseong, south of Seoul. "We are building the new line to prepare for rising demand of memory chips," the company said in a filing to the Financial Supervisory Service. The company said part of the investment for the new chip facility will come from the company's capital spending budget of $9.92 billion, and Samsung has already spent 85 percent of its semiconductor capital spending budget of $5.8 billion as of the third quarter, according to the report.

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