Samsung to Expand Chip Packaging Facilities for HBM

Samsung Electronics will expand its semiconductor package facilities in South Chungcheong Province to boost production of high bandwidth memory (HBM) chips, company officials said on Tuesday.

Under a memorandum of understanding with the provincial government, Samsung Electronics will convert an underused liquid crystal display plant owned by Samsung Display Co. in Cheonan, some 85 kms south of Seoul, into a semiconductor fabrication plant, according to the officials.

The new facilities, expected to be completed by December 2027, will feature advanced packaging lines for HBM chips, which are in high demand due to their essential role in AI computing, reports Yonhap news agency.

Packaging is a critical stage of the semiconductor manufacturing process that protects the chip from mechanical and chemical damage.

Samsung Electronics expects the upgraded facilities in Cheonan will help the company regain a competitive edge in the global semiconductor market.

The world's largest memory chipmaker has apparently fallen behind its local rival SK hynix Inc. in the HBM segment.

Samsung Electronics' plans to supply its latest fifth-generation HBM3E products to Nvidia Corp. have been delayed due to quality concerns.

Meanwhile, Samsung has hinted at the possibility of supplying its advanced high bandwidth memory (HBM) chips to US AI giant Nvidia in the near future.

The South Korean tech giant has been struggling to have its HBM3E chips pass Nvidia's quality tests, while its local chipmaking rival SK hynix Inc. recently began mass-producing industry-leading 12-layer HBM3E chips.

"We are currently mass-producing both eight-layer and 12-layer HBM3E products," said Kim Jae-june, vice president for memory business at Samsung Electronics, during a conference call following the release of its third-quarter earnings report.

Kim noted that the company has achieved "meaningful progress" in meeting quality testing requirements for a "major customer," expected to be Nvidia, whose GPUs are essential for AI computing.

"We expect to expand sales in the fourth quarter," he added, addressing previous concerns that Samsung Electronics had fallen behind in supplying HBM products to Nvidia.