Samsung Electronics breaks ground for sixth domestic contract chip manufacturing line

The logo of Samsung Electronics is seen at its office building in Seoul, South Korea, March 23, 2018. REUTERS/Kim Hong-Ji

SEOUL (Reuters) – South Korea’s Samsung Electronics Co Ltd on Thursday said it has broken ground for its sixth domestic contract chip production line, which will make logic chips as part of efforts to reduce its reliance on the volatile memory chip sector.

Samsung is taking on bigger rival Taiwan Semiconductor Manufacturing Co Ltd (TSMC) in the contract manufacturing business, where it competes to win orders from customers such as Qualcomm Inc.

The line in the city of Pyeongtaek, within a two-hour drive of capital Seoul, will produce advanced 5 nanometre chips using extreme ultraviolet (EUV) technology. Samsung broke ground earlier this month and plans to start production in the second half of next year.

Reporting by Heekyong Yang and Hyunjoo Jin; Editing by Christopher Cushing