From TechRadar · · 1m 40s
Samsung outsources memory to focus on AI chips
Samsung is shifting DDR5 and SSD production to external partners to free up factory space for advanced HBM packaging needed for artificial intelligence.
In brief
Samsung is shifting DDR5 and SSD production to external partners to free up factory space for advanced HBM packaging needed for artificial intelligence. Samsung is outsourcing conventional memory production to third-party manufacturers to reserve internal capacity for higher-margin HBM chips used in AI systems…
Samsung shifts memory production outward
Samsung Electronics is outsourcing all additional DDR5 and SSD production to external manufacturers, reserving internal capacity for advanced HBM packaging.
Space constraints drive the decision
Samsung lacks space to expand back-end production lines needed for artificial intelligence semiconductors, so it is reallocating space at packaging plants in Cheonan and Onyang.
Partners scale up capacity
Samsung has pressed outsourced partners including Dreamtech, Hanyang Digitech, and SFA Semicon to expand capacity for DDR5 modules and SSDs, accelerating existing plans.
Dreamtech expands in India
Dreamtech began mass producing DDR5 modules in India last November and approved further equipment investment in June. Its Noida facility will eventually reach over fifty million units annually.
Vietnam and Philippines investments
Hanyang Digitech invested more than thirty one point five billion won in two thousand twenty six to automate its Vietnam plant. SFA Semicon relocates equipment to the Philippines starting November.
HBM plant drives capacity crunch
Samsung's capacity constraints stem from a new HBM plant under construction at Onyang, valued at six trillion won, which will take multiple years to finish.
Outsourcing is simpler for conventional memory
DDR5 modules require mounting prepackaged chips onto circuit boards using surface-mount technology, a process considerably less complex than advanced HBM packaging, making outsourcing straightforward.
The short version
Samsung is outsourcing conventional memory production to third-party manufacturers to reserve internal capacity for higher-margin HBM chips used in AI systems.
