July 26, 1996 in Social Responsibility News

SAMSUNG Starts Offshore Semiconductor Production in Suzhou, China

(SEOUL, Korea) - Samsung Electronics Co. (SEC) celebrated today the opening of its new US$100 million semiconductor assembly and test facility in the People`s Republic of China. Samsung Electronics (Suzhou) Semiconductor Co. (SESS) plant, located in Suzhou, was dedicated in a ceremony attended by over 500 dignitaries, including Jiangsu Province Vice-governor, Xiao Tang YANG; Samsung Electronics Co. President, Yoon-Woo LEE, and Samsung China Headquarters President, Yong CHUNG.

Samsung`s localization strategy emphasizes `produce where the market is.` SESS is the company`s first 100%-invested semiconductor plant outside Korea, and Samsung is now on its way to constructing a global production network. The Suzhou plant is build on a site of 100,000 m2 and has about 15,000 m2 in floor space. It has highly skilled work force and will enjoy strong product competitiveness. By the end of the year, the new facility will employ around 1,000 people.

The company invested about US$100 million to build the Suzhou plant, which will have an initial capacity to assembly 20,000 transistors and 20,000 non-memory ICs (Integrated Circuits) a month. For the near future, Samsung plans to atleast double production each year. The company also will aggressively invest in new offshore plants for memory devices when the market recovers.

The Chinese and Southeast Asian semiconductor markets are expected to developrapidly, and SESS is in an excellent position to be a leader in the region. In 1999, the Chinese semiconductor market is expected to count for 22.6% of theAsian market and 7% of the global semiconductor market. Samsung predicts thatthe annual average growth rate of the Chinese semiconductor market will be 26% untilt 1999.

Samsung Electronics Company Ltd. (US$21 billion) is a world leader in the electronics, with operations in more than 60 countries. The company develops, manufactures, and markets audio and video products, household electronics goods, computers & peripheral products, display products, telecommunications & information systems, software tools & semiconductors. It is the flagship company of the Samsung Group (US$84 billion).

Samsung Electronics in China:

In December 1994 the Chinese and Korean governments agreed to let Samsung Electronics build the SESS plant in Suzhou. Permits for ground preparation and construction were granted in June 1995; ground was broken the next month and theplant was completed in just one year.

Samsung is taking aim at the Chinese electronics market, which has huge growth potential. The company plans to build electronics complexes here that will be similar in scale to its massive operations in Korea (at Suwon and Kiheung). Samsung Electronics now has six plants in Korea; two both in Suzhou and Tianjin, one in Shandong and one in Huizhou. These plants produce everything from semiconductors to finished consumer electronics and telecommunications hardware.

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