Unable to escape the impact of inflation, the construction cost of Samsung’s new Pyeongtaek factory has increased by more than one trillion won

According to Korean media reports, the increase in global inflation has also affected Samsung Electronics' important investment projects. The construction party of the semiconductor factory in Pyeongtaek, South Korea is adjusting the construction contract price. Samsung Electronics will bear additional costs of more than 1 trillion won.

According to industry insiders, Samsung C&T, Samsung Engineering, and Samsung Heavy Industries will continue to increase the contract amount for Samsung Electronics to build a semiconductor factory in Pyeongtaek City in the second half of this year. These three companies have long been responsible for the overall construction of Samsung Electronics' semiconductor factories at home and abroad, from design to framework, civil engineering, and finishing.

According to reports, since the end of the third quarter of this year, these companies have continuously increased the construction costs of Samsung Electronics Pyeongtaek P2 · P3 and Samsung EUV dedicated factory V2. Samsung C&T increased the contract amount by 550 billion won from 5.68 trillion won to 6.23 trillion won through a total of four correction notices during the November-December period. In particular, the cost of completing the P3 Ph2 production line increased by 341 billion won.

Samsung Engineering issued correction notices five times between September and December to change the contract size. As a result, the contract amount increased by 472 billion won from 3.275 trillion won to 3.747 trillion won.

Samsung Heavy Industries recently increased the contract amount for the completion of the P3 Ph2 production line by 46 billion won. In this way, if the revised contract size of the three companies is added together, the cost that Samsung Electronics will bear will exceed 1 trillion won. Construction deadlines have also been pushed back by up to a year for some contracts.

The industry believes that continuous global inflation has led to an increase in equipment investment costs for Samsung Electronics. According to the latest data released by the Korea Institute of Building Technology, the construction cost index in October rose by 15.35% year-on-year. The construction cost index is an indicator that measures the price changes of direct construction costs such as materials, labor, and equipment used in construction projects.