Samsung is shifting the production of conventional memory modules, including DDR5 and SSDs, to other plants as it reserves its in-house capacity for more advanced HBM production aimed at AI data centers.
“Samsung Electronics lacks space to expand existing back-end production lines needed to manufacture semiconductors for artificial intelligence (AI), so it is reallocating space and equipment at packaging plants in Cheonan and Onyang to advanced packaging lines, including HBM,” an insider revealed.
The source added that instead of expanding its own capacity, Samsung has decided to outsource the production of conventional memory modules.
Samsung reportedly pressured its assembly partners to expand their capacity to produce DDR5 and SSD modules. Partners that already had expansion plans were also asked to accelerate them.
SFA Semicon is one of those partners. Based in Angeles, Pampanga, the company will take over DDR5 testing and assembly currently conducted at Samsung’s Onyang campus in South Korea.
The transition will begin this November, with the second phase scheduled to start in Q2 2027.
Samsung has also tapped India-based Dreamtech, which was already mass-producing DDR5 modules in the country last November. Meanwhile, Samsung’s Noida facility, which previously manufactured smartphone circuit boards, will soon focus on producing 50 million memory modules annually.
A Samsung memory plant in Vietnam also recently received a KRW31.5 billion investment to automate its operations.