Samsung to invest in $20B next-generation chip plant

Even as competition gets tougher for a share of the smartphone market, Samsung Electronics is going ahead with a plan to build a $15.6 trillion won($20 billion Cdn) chip plant in South Korea.

Construction in Gyeonggi province, south of Seoul, will begin in the first half of next year with semiconductor operations due to commence in 2017.

Semiconductors have long been a backbone of Samsungs business. This investment allows the company to move up-market, providing chips for sophisticated home control systems, wearable devices and smart cars.

Samsungs operating profit is down from this year as worldwide sales of its Galaxy smartphones stall. It is losing market share to Apple and to a host of Chinese makers of cheaper handsets.

The company releases financial results for the third quarter tomorrow. Operating profit is projected to plunge 47 per cent and sales may drop up to 15 per cent, analysts estimate.

Samsung moved up the release date for its Galaxy Note 4 smartphone to the end of September, so it could enter the China market before Apples new products get full release.