Samsung fast-tracks new chip plant to reach 1 million wafers per month

After earning record-breaking profits in the previous quarter, Samsung is ensuring it has enough chips to meet demand during the AI boom. The company has made a strategic move to fast-track construction of its first chip fabrication plant in Yongin, South Korea. Samsung aims to open the plant two years earlier than originally planned.

According to a report from Seoul Economic Daily, Samsung Electronics plans to open its first chip plant at the Yongin complex, known as Y1, by 2029. That is two years ahead of the original 2031 timeline. The main reason is surging demand for artificial intelligence (AI) chips, and Samsung wants to ensure it has enough production capacity to capitalize on that demand.

Samsung's current chip production capacity is around 650,000 wafers per month. Once the Y1 fab becomes operational, the company's production capacity will reach 1 million wafers per month. Y1 is just one of six new fabs the South Korean firm has planned for its Yongin site.

To meet its 2029 production target, Samsung needs to begin site preparation in the second half of this year, with construction scheduled to start in early 2027. To support the project, the South Korean government is helping provide crucial utilities, including a 3GW LNG power plant and water supply lines.

Samsung recently announced a KRW 2,030 trillion (~$1.36 trillion) investment plan for its Pyeongtaek-Yongin chip cluster. Analysts expect the company to increase its capital investment by 30% to 40% annually over the next three years to fund the development of its chip plants.