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Samsung Outsourcing Memory Production for AI Chip Space
20 Sep
Summary
- Samsung is shifting DDR5 and SSD production to outside manufacturers.
- Company needs internal factory space for advanced HBM production.
- DDR5 module assembly is simpler than advanced HBM packaging.
Samsung Electronics is reallocating its manufacturing resources, shifting the production of conventional DDR5 memory modules and SSDs to external partners. This strategic pivot is driven by Samsung's urgent need to secure in-house capacity for the advanced packaging processes required for High Bandwidth Memory (HBM), a critical component for artificial intelligence (AI) hardware.
The company is directing its growth in DDR5 and SSD assembly towards outsourced firms, including Dreamtech, Hanyang Digitech, and SFA Semicon. These partners are accelerating capacity expansions in response to Samsung's requests. Dreamtech is scaling up DDR5 production in India, Hanyang Digitech is automating its plant in Vietnam, and SFA Semicon is relocating equipment to the Philippines.
This shift is necessitated by limited back-end production space. Samsung is investing in new HBM facilities at its Onyang campus and a back-end processing plant in Vietnam. The comparatively simpler assembly of DDR5 modules makes them suitable for outsourcing, unlike the more intricate packaging methods for HBM. This strategy mirrors past industry moves, such as Micron's similar allocation of resources.
