Samsung Leans on Chip Production with New $14.7 Billion Plant

Smartphone securitySamsung Electronics has announced plans to develop a new chip plant in the South Korean city of Pyeongtaek, according to Reuters. The plant will cost about $14.7 billion to construct, and is expected to open in 2017.

The move is seen as a strategic response to a growing glut in the smartphone market. With its iPhone line, Apple has been edging Samsung out of the premium smartphone market, while smaller competitors are beginning to crowd the lower end of the spectrum. With limited growth projected for its line of Galaxy smartphones, Samsung is now looking to churn out more chips through its semiconductor division – the most reliably profitable branch of the company and the one with the most room to grow, since all those smartphones flooding into the field will need mobile chips, after all.

It seems a prudent move. As smartphone technology cheapens and becomes more commonplace, once-dominant brands will likely continue to struggle to distinguish their products. Even advanced mobile technology like biometric security, which in the past year has rested solely in the premium smartphone domain, is now set to go mainstream as small mobile producers like India’s Xolo release budget smartphones equipped with fingerprint-scanning technology.

The new Samsung plant could also prove very beneficial to South Korean industry; once completed, it’s expected to create 150,000 jobs – roughly equivalent to a third of Pyeongtaek’s population.