Samsung has announced today that it is now started operating the world's largest memory fab line called Line-16. The new fab will provide the largest production capacity in the industry and will allow Samsung, who is already one of the largest memory makers around, to grab even more of the market by sheer volume of production. This new fab will also mean that the sheer volume of memory on the market will be increased.
More volume often leads to reduced prices but if Samsung can grab more of the market, it can offset the lower sales prices in volume. Samsung already counts Apple among its largest buyers of memory. Line-16 will be making the first mass production runs of DDR3 DRAM based on 20nm class process technology. That process technology allows for better productivity on the construction line and makes for less energy consumption in use inside computers and servers.
Line-16 is located in the Nano City Complex in Hwaseong, Gyeonggi Province that Samsung operates. Construction on Line-16 kicked off in May of 2010 and the installing of the equipment for clean rooms was finished this May. Trail production kicked off in June and the facility was ready for mass production in August. The facility is inside a 12-story building and has 198,000 square meters of space, and is projected to produce 10,000 12-inch wafers monthly.
Interestingly, we aren’t that far removed from the time when memory sold for less than it cost to make. On the surface launching a new plant to make even more seems like a bad idea, especially when construction started when the economy in the US, one of the largest tech consumers in the world, was very bad. Apple was also one of the only tech firms that was able to grow during the economic turmoil. It's worth noting that the Samsung plant is ready for mass production at roughly the same time that the iPhone 5 and iPhone 4S are coming.
Apple is one of the biggest buyers of Samsung for memory products. Perhaps this is the way that Apple will drive the cost of hardware inside the iPhone 5 and 4S, by having a massive production capacity at its disposal and at the same time allowing Samsung the capacity to support its other customers. Memory is the typically around the third most expensive part inside a smartphone behind the screen and chipset so things make a little sense when you consider just how many of the iPhone 4S and iPhone 5 smartphones Apple will sell along with iPads and other gear. What do you think, could a massive sales goal for new Apple iPhones be the driving force behind this Samsung expansion?