Proactive Expansion of Memory Production Capacity with Pyeongtaek Plant 5
Strengthening Computing Infrastructure with New AI Data Centers
Expanding New Businesses by Integrating HVAC and Data Centers
Active Review of Domestic Production Base for All-Solid-State Batteries
Investing in Next-Generation Manufacturing Technologies such as OLED and Package Substrates
On November 16, Samsung Electronics announced that it recently held an ad hoc management committee meeting and decided to proceed with the framework construction of Line 5 (Plant 5) at the Pyeongtaek Campus Phase 2. This move is aimed at securing production capacity in advance to meet the anticipated increase in demand for high-performance memory driven by the spread of AI.
Samsung Electronics identified the expansion of semiconductor production capacity as the core of this investment plan. By starting construction of Plant 5 (Line 5, Phase 2) at the Pyeongtaek Campus, the company aims to strengthen its strategic position in the memory-centric global supply chain. Plant 5, scheduled to begin operation in 2028, is a long-term investment designed to meet rising demand for high-bandwidth memory (HBM) and server DRAM as AI adoption grows. This is a large-scale project that includes expanding infrastructure.
The reason Samsung Electronics has made semiconductor production capacity expansion the centerpiece of its 450 trillion won investment plan is not simply to increase output, but as a strategic response to changes in the global memory market structure. As demand for high-bandwidth memory (HBM) surges with the proliferation of AI servers, securing stable memory production capacity has become directly linked to corporate competitiveness.
Samsung Electronics plans to further strengthen its strategic position in the memory-focused global supply chain. Plant 5 is targeted to begin operation in 2028. The expansion of generative AI is increasing the scale of data centers and the volume of GPU-based computation, which is expected to sustain mid- to long-term demand for HBM and server DRAM.
Samsung has adopted a strategy of securing production facilities earlier than before, considering that demand volatility for major products such as HBM, DRAM, and NAND flash has grown compared to the past. In the rapidly expanding AI market, the timing of securing production lines can determine the gap with competitors. Additionally, with geopolitical risks rising in global supply chains, the company believes that securing a stable production base within a single country is advantageous for long-term response.
Pyeongtaek Plant 5 is a project involving both infrastructure expansion and large-scale equipment investment. Once the line is completed, Samsung’s memory production will become even more concentrated in Pyeongtaek, and the company expects the Pyeongtaek complex to serve as a core production hub for the AI era across the entire supply chain.
AI infrastructure is also the area where Samsung’s future strategy is most clearly revealed, with Samsung SDS effectively serving as the group’s “AI infrastructure integrator.” As the nation faces a shortage of computing resources needed for large-scale AI training, Samsung is expanding its investments not only for its own AI services but also to strengthen the computational foundation across the entire domestic industry.
Samsung SDS will build a large-scale AI data center in South Jeolla Province. In this project, Samsung SDS will participate as the main operator in a special purpose company (SPC) consortium to establish a national AI computing center. The goal is to secure 15,000 GPUs by 2028. For domestic companies and research institutions developing large-scale AI, access to high-performance GPU infrastructure is absolutely crucial. The decision reflects the need for national-level AI infrastructure to reduce the initial investment costs that are currently too high for the private sector alone. This facility will be operated as a public infrastructure, supplying computing resources to academia, startups, and small and medium-sized enterprises.
Additionally, Samsung SDS will separately build an AI-specialized data center at the Gumi Plant 1 in North Gyeongsang Province. This facility will serve as Samsung’s internal AI hub, supporting the development of AI services, on-device AI, and large-scale model training by Samsung Electronics and its affiliates. As all of Samsung’s major business divisions-including semiconductors, mobile, home appliances, and networks-are expanding AI capabilities, securing shared computational resources for the entire group has become essential.
As a result, the South Jeolla center will serve the “national and industrial ecosystem,” while the Gumi center will focus on “internal technology development for Samsung,” establishing a dual-track strategy. Samsung is thus building a structure to simultaneously strengthen both external and internal AI infrastructure in the AI era.
The industrial HVAC (heating, ventilation, and air conditioning) business is a new non-memory growth engine in Samsung’s investment plan, driven by the global surge in energy demand from data centers and large industrial facilities. As power consumption in AI data centers increases exponentially, high-efficiency HVAC technology for cooling, ventilation, and humidity control is becoming a key competitive factor, and Samsung is moving strategically to lead this market.
In early November, Samsung Electronics completed the acquisition of FlaktGroup, Europe’s largest HVAC company. FlaktGroup specializes in central HVAC systems and holds technology tailored for large industrial facilities, hospitals, and data centers where energy efficiency is critical. By combining its existing residential and commercial individual HVAC (cooling, heating, ventilation) product lines with FlaktGroup’s central HVAC technology, Samsung can now offer an integrated solution.
The rapid increase in HVAC demand in the data center market is another reason Samsung has chosen this field as a strategic business. As GPU-based large-scale AI computation grows, heat generation rises sharply, making high-efficiency cooling systems increasingly important. Rather than simple air conditioning, comprehensive solutions including HVAC, heat exchange, and energy recovery are required, highlighting FlaktGroup’s technological competitiveness.
FlaktGroup is considering establishing a production line in Gwangju. Setting up a domestic manufacturing base would enable immediate response to rapidly growing demand in the public, data center, and smart building sectors, while also stabilizing the supply chain for the Asian market. Samsung Electronics believes that, once the Gwangju production line is established, it will be able to fully expand its HVAC system business, integrating design, manufacturing, and control systems.
Samsung’s approach is to create a portfolio encompassing “individual HVAC (Samsung Electronics), central HVAC (FlaktGroup), and AI data center infrastructure (Samsung SDS).” The goal is to expand business not only in the data center cooling market but also across the high-value HVAC industry, including smart factories, hospitals and research facilities, and eco-friendly buildings.
In the battery sector, Samsung SDI is actively considering building a domestic production base for next-generation all-solid-state batteries. The company has designated all-solid-state batteries as a “strategic technology requiring mass production in the future” and is reviewing its Ulsan plant as a leading candidate for production.
In March 2023, Samsung SDI became the first in Korea’s battery industry to install a pilot line for all-solid-state batteries at its Suwon SDI Research Center and began producing prototypes at the end of that year. Since then, the company has supplied prototypes to various clients for testing and, after verifying process stability and performance, is developing the technology with a target of mass production by 2027. All-solid-state batteries offer higher safety and energy density than conventional lithium-ion batteries, making them a promising next-generation battery for electric vehicles. Therefore, the company is conducting preliminary verification and facility investments in parallel to accelerate commercialization.
Recently, Samsung SDI signed a memorandum of understanding for an “all-solid-state battery demonstration project” with BMW in Germany, further expanding validation cooperation with global automakers. Through customer demonstration processes and pilot line operations, Samsung SDI plans to refine the design, process, and quality standards for all-solid-state batteries while securing the production technology competitiveness needed for mass production.
Samsung Display is set to establish an OLED production system for IT devices at its Asan plant in South Chungcheong Province, targeting mass production by mid-next year. This investment responds to the expanding market for medium- and large-sized displays for IT devices such as tablets and laptops, with trial operations beginning at the end of this year.
Semiconductor package substrates are a focus area for Samsung Electro-Mechanics. The company is developing and mass-producing advanced server package substrates (FC-BGA) at its Busan plant and is actively targeting the high-performance server substrate market, where demand is rising due to the proliferation of AI accelerators. Efforts are also underway to expand supply to global big tech clients and to secure new customers.
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