Samsung Electronics (005930.KS) will bring its fourth plant (P4) at the Pyeongtaek campus into full operation within this year, having invested 50 trillion won ($36 billion) in its construction to expand in the artificial intelligence (AI) memory market. The company plans to actively utilize "temporary-use approval" to accelerate P4's full operation by roughly six months ahead of the original schedule. The strategy aims to cement the technological lead of its sixth-generation high-bandwidth memory (HBM4) — the world's first such chip to reach mass-production shipment — through a "manufacturing superiority gap" backed by overwhelming production capacity.
According to industry sources on Wednesday, Samsung Electronics plans to secure temporary-use approval for P4's upper (Ph4) line in July and its lower (Ph2) line in November to begin operation. Last month, Samsung C&T's construction division won a 1.379 trillion won contract for P4's lower floor finishing work, accelerating the final construction stages. P4, which will house four cleanrooms across two floors, is currently operating at only half capacity.
Temporary use is a fast-track approach that secures approval for specific zones before full completion, allowing semiconductor equipment to be brought in early. Through this method, the timeline for P4's full operation will be dramatically shortened by about six months compared with the original schedule. Once P4 — a single fab receiving about 50 trillion won in investment — enters full operation sequentially within the year, Samsung Electronics' earnings improvement, riding the semiconductor supercycle, is expected to accelerate further.
The Pyeongtaek fifth plant (P5), which broke ground on structural work last November, also entered main construction this month, picking up the pace. P5, a mammoth-class fab featuring six cleanrooms across three floors, is estimated to require total investment of more than 80 trillion won. Samsung C&T (2.8932 trillion won) and Samsung E&A (1.879 trillion won) recently signed large-scale structural and construction contracts with Samsung Electronics, putting construction firmly on track.
Samsung is doubling down on achieving a "production superiority gap" on top of its technological lead to respond in a timely manner to surging HBM and broad-based memory chip demand, including from Nvidia's next-generation AI chip "Vera Rubin," which will enter full mass production in the second half of this year. Samsung Electronics plans capital spending of approximately 70 trillion won this year, with a significant portion allocated to expanding Pyeongtaek campus infrastructure.
Jun Young-hyun, Samsung Electronics CEO and Vice Chairman, recently emphasized to shareholders, "In response to expanding AI demand, we will steadfastly continue preemptive facility investment and research and development (R&D) investment to secure future technologies."
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Samsung Electronics has launched an unprecedented production speed battle by activating the "temporary use" strategy for its Pyeongtaek campus fourth plant (P4) and the "Twin Fab" strategy for its fifth plant (P5). As forecasts materialize that the AI semiconductor supercycle will not be a one-off boom but will continue long-term, the move is being interpreted as Samsung's decisive bet to completely dominate the AI semiconductor value chain armed with overwhelming production capacity.
P4 is where Samsung is prioritizing the expansion of production capacity. The "temporary use" approach that Samsung Electronics plans to apply to the P4 line allows the company to secure usage approval for specific zones before the entire building is completed, begin creating cleanrooms, and bring in key semiconductor equipment preemptively. This significantly reduces the physical time required for equipment setup and trial operation, advancing the operation timeline by at least six months and dramatically increasing chip production volume.
P5, the next key base, also focuses on maximizing speed and efficiency. Samsung plans to build its next new plant after P5 not as a newly designed P6 but as "P5-2," which will have a structure 100 percent identical to P5. Typically, when a semiconductor line design changes, major global customers spend months meticulously re-verifying product yield and quality (Qual Test). But when chips are produced in a twin fab with a perfectly identical structure, such complex and exhausting verification procedures can be skipped, enabling immediate mass supply.
The fundamental reason Samsung Electronics is staking everything on such rapid capacity expansion is that the severe global memory supply shortage is intensifying. According to foreign media and industry sources, the dominant gloomy outlook is that even if global memory companies devote all their efforts to fab expansion and production line conversion through next year, they will only meet about 60 percent of the surging AI memory demand. This means the current AI-driven memory supercycle is fundamentally different from the past volatile markets driven by replacement demand for front-end information technology (IT) devices such as PCs and smartphones.
Under these circumstances, heads of global big tech companies and C-level executives in charge of procurement are boarding planes to Korea one after another. They are directly visiting memory manufacturers including Samsung Electronics, pleading for three-to-five-year long-term agreements (LTAs) in an urgent push to secure stable supply. "In a market where demand is firmly guaranteed and supply is severely short, the company that produces volume first and supplies it on time holds absolute pricing power and advantage," an industry official said.
Analysts say that by further expanding its already overwhelming production capacity, Samsung Electronics has seized a golden opportunity to flip the HBM market landscape in one stroke. For Samsung, which firmly reclaimed the top spot in the commodity DRAM market late last year, the remaining task is to conquer the HBM market, where it ceded the lead to a competitor. Observers are increasingly confident that, in step with the launch of Nvidia's next-generation AI accelerator "Vera Rubin" entering full mass production in the second half of this year, Samsung Electronics will mass-produce HBM4 at the early-operating P4 and reverse market share in one stroke.
The scale of capital being invested to support this speed battle is also overwhelming. Considering that building P5 alone as a single fab requires about 80 trillion won, constructing the twin fab (P5 and P5-2) is projected to require massive funding of more than 160 trillion won in total. Samsung C&T disclosed a 2.8932 trillion won contract for P5 fab construction, while Samsung E&A announced a 1.879 trillion won contract for structural work, adding firepower to the speed battle.
Behind the steadfast execution of this astronomical investment is the solid cash-generating capability driven by record-high earnings. Samsung Electronics posted preliminary operating profit of 57 trillion won in the first quarter alone, setting a record that will go down in Korean corporate history. According to financial data provider FnGuide, Samsung Electronics' annual operating profit forecast for this year is estimated to reach approximately 319 trillion won, driven by the explosion in AI memory demand.
Experts believe that Samsung Electronics' turnkey competitiveness — spanning memory, foundry (contract semiconductor manufacturing), cutting-edge design and packaging — will create explosive synergy in combination with this infrastructure expansion. "There are forecasts that Samsung, which has internalized both advanced memory and foundry capabilities, will far surpass the heyday of Intel, which dominated the central processing unit (CPU) market during the PC era," said Kim Yong-seok, chair professor at Gachon University's Graduate School of Semiconductors. "It has seized a perfect opportunity to newly leap forward as an 'integrated AI semiconductor empire.'"
