According to South Korean media, driven by the surging demand for high-bandwidth memory (HBM) amid expanding investments in AI infrastructure, Samsung Electronics is planning to relocate part of its back-end operations for legacy memory from its factories in Cheonan and Onyang, Chungcheongnam-do, South Korea, to Vietnam. This move aims to refocus its domestic back-end manufacturing capabilities on high-value-added products like HBM.
New Vietnam Facility to Focus on Legacy Memory Back-End Operations
Samsung Electronics is targeting a production launch in November 2027 for a new semiconductor back-end facility in the An Phong Industrial Park in Thai Nguyen Province, Vietnam. To secure local environmental permits, Samsung’s project proposal indicates a first-phase investment of approximately $1.5 billion. The local operating entity, "Samsung Vietnam Semiconductor (SVS)," was established in the first quarter of this year and has been listed as a newly consolidated subsidiary of Samsung Electronics. Public records show that SVS was incorporated on March 13, with its primary business covering the packaging and testing of semiconductor materials and equipment.
The new plant is expected to primarily handle back-end operations for legacy DRAM and NAND Flash memory. According to foreign media reports, the facility will have a maximum annual processing capacity of 153.3 billion Gb for DRAM and 255.6 billion Gb for NAND flash, with a strategic focus on legacy storage products.
Domestic Capacity Pivoting Toward HBM; Equipment Transfers Expected in Phases
Industry analysts believe Samsung may gradually transfer existing packaging and testing equipment for legacy memory from its Cheonan and Onyang plants to Vietnam, though a specific timeline has yet to be determined. Given that cleanroom construction and equipment installation will be required after the factory is built, equipment relocation is expected to commence in the second half of next year.
In terms of priority, equipment used for legacy memory is likely to be transferred first. The vacated domestic production space will most likely be repurposed to expand back-end capacity for high-value-added memory, such as HBM. The industry widely anticipates that Samsung will adopt a division of labor model: "HBM production in South Korea, legacy memory processing in Vietnam."
Increased Domestic Investment in HBM; Legacy Memory Capacity Not Completely Exiting Korea
This capacity restructuring plan aligns closely with Samsung Electronics' recent domestic investment strategy. Last month, Samsung announced a 56 trillion won ($41 billion) investment to transform its Cheonan and Onyang facilities into a next-generation HBM production hub. The company is currently aggressively expanding HBM4 capacity and projects that its HBM sales this year will more than triple compared to last year.
However, this does not mean domestic back-end operations will pivot entirely to HBM. Industry sources expect Samsung to maintain substantial investments in DRAM and NAND next year. Back-end operations for high-value-added products like DDR5 and enterprise SSDs (eSSD) will continue domestically. Industry insiders note that after transferring existing equipment to the Vietnam facility, Samsung is highly likely to utilize the freed-up space to introduce additional DRAM and NAND-related equipment.
