SamMobile has affiliate and sponsored partnerships. If you buy something through one of these links, we may earn a commission.

News For You
News For You
Notifications

Samsung taking a $3.6 billion loan to build more chip factories

Business
By 

Last updated: June 27th, 2024 at 13:51 UTC+02:00

Samsung is investing heavily in chip factories at home in South Korea and overseas as it looks to better compete against its rivals in the segment. The company is funding many of these endeavors from its own deep pockets and is also capitalizing on loans, incentives, and grants being offered by various governments to build the facilities.

The company is now reportedly close to securing a $3.6 billion loan that will be utilized for building more chip factories in South Korea and across the globe. The loan is to be sanctioned by a major bank in South Korea.

Samsung isn't afraid of spending money on its chip factories

Samsung is reportedly close to borrowing $3.6 billion from the state-run Korea Development Bank to finance new chip factories. The discussions are currently focused on the exact borrowing size and interest rates, local media reports.

This loans will be provided as part of the $10 billion or so lending scheme that the South Korean government has announced to boost its domestic semiconductor industry. SK Hynix, one of Samsung's biggest competitors in the memory segment, is reportedly borrowing close to $2 billion under this scheme as well.

It's a big deal if Samsung is now turning to debt to finance its chip facilities. It hasn't borrowed funds from the bank in two decades. The company has focused on running its operations without borrowing and instead dipping into its massive cash reserves to fund projects. It has now changed gears now and is open to taking on debt as it seeks to fully capitalize on the AI chipmaking boom.

Samsung is also said to be considering its first corporate bond issue since 2001 in South Korea, and its first bonds since April 2012 overseas. Earlier this year, Samsung also started the process to bring back billions of dollars in cash from its subsidiaries overseas to the headquarters in South Korea, likely to fund chip factories and potential acquisitions.

Business Foundry
Galaxy AI summarized

Scroll for more related content
News For You

You might also like

Samsung makes changes at its chip factory to better meet demand

Samsung makes changes at its chip factory to better meet demand

Challenges persist for Samsung's lucrative semiconductor business but the company is hopeful that things will start looking up in the second half of this year. Samsung is now making some changes at its chip factory in a bid to improve efficiency and better respond to market demand. Samsung is specifically adjusting the construction schedule at […]

  • By Adnan Farooqui
  • 5 months ago
Samsung wins big chip contract from an undisclosed AI company

Samsung wins big chip contract from an undisclosed AI company

Samsung views AI chips as a major driver of future growth. The company is focusing on expanding its production capabilities of these advanced chipsets to gain a leadership position in this segment. To that end, the company has signed a big contract with a disclosed AI company to develop an AI chip on its next-generation […]

  • By Adnan Farooqui
  • 5 months ago
Samsung buys even more land for new US chip factory

Samsung buys even more land for new US chip factory

Samsung announced in November 2021 that it would be purchasing new land plots for the construction of a new foundry in the USA. While Samsung looked at multiple locations, it finally settled for Texas. Now latest reports confirm that the Korean giant has completed the additional land acquisition and is waiting for approval from the […]

  • By Sagar Naresh
  • 2 years ago
Samsung may hold groundbreaking for $17 billion Texas chip plant in June

Samsung may hold groundbreaking for $17 billion Texas chip plant in June

Samsung recently confirmed that it's going to build a new chipmaking plant in Taylor, Texas. The cost of this project is a whopping $17 billion. It also happens to be the largest foreign direct investment in the state of Texas. Construction on the project is expected to begin this year. A lot of the preliminary […]

  • By Adnan Farooqui
  • 2 years ago
Samsung looking for tax breaks to build more chip plants in Austin

Samsung looking for tax breaks to build more chip plants in Austin

Austin, Texas was already home to one of Samsung's most advanced chip manufacturing facilities in the world. The company recently announced that it would build a brand new $17 billion chipmaking factory in nearby Taylor. It appears that Samsung may be looking into the feasibility of further expanding its facilities in the state of Austin. […]

  • By Adnan Farooqui
  • 2 years ago
Qualcomm becomes one of Samsung’s top clients for the first time

Qualcomm becomes one of Samsung’s top clients for the first time

Samsung's contract chip manufacturing business is a cash cow for the company. The conglomerate makes a significant chunk of its revenues from this division. It's also actively trying to win over more customers from TSMC, the leading contract chip manufacturer. Qualcomm has often relied on Samsung's foundry to manufacture its chips. It tends to split […]

  • By Adnan Farooqui
  • 2 years ago