Today, Samsung started construction of a new fab which will cost, says the company, $11bn. It is the first new fab to be built in Korea for five years, and is expected to start running wafers in 2011.
A fab costing $11bn has to be running over 100,000 wafers a month - what TSMC calls a GigaFab.
Samsung’s previously announced figure for capex this year was $5bn – the highest in the semiconductor industry.
However a sparkling Q2 result showed that that semiconductor division is contributing about half the profits of the entire corporation.
On the back of a jump in DRAM prices the semiconductor division made profits of around $2bn in Q1.
The decision to substantially hike semiconductor capex this year shows a determination to outpace its DRAM rivals, although the bulk of the output for the investment will start producing product in 2012, when market conditions may be very different from the buoyant conditions of this year.
Samsung’s second most profitable division is LCD with a profit contribution of around $560m in Q1, and this is the target for another big increase in capex this year to $4.4bn. The previously announced LCD capex figure was $2.6bn.
On top of the LCD investment Samsung says it plans to put $2.2bn into building an AM-OLED plant due to come on-stream in 2012.