Samsung to Upgrade Xi'an Plant to 286-Layer NAND Flash

According to a report from BusinessKorea, Samsung is planning to upgrade its NAND Flash manufacturing process at its Xi'an facility in China to a 286-layer stacked technology. This move comes in response to the ongoing market slowdown and increasing competition.

The report highlights that since 2023, Samsung has been advancing its Xi'an plant's mainstream NAND Flash production process from the 128-layer stacked technology to 236-layer stacked technology. To further enhance its competitiveness, Samsung has decided to install a new production line with 286-layer stacked NAND Flash. The new equipment will be introduced in the first half of the year, with plans to establish a production line capable of producing 2,000 to 5,000 wafers per month by the second half. This development is part of Samsung's strategy to maintain its technological leadership and ensure long-term product competitiveness.

The Xi'an plant is crucial to Samsung's global supply chain, producing approximately 40% of the company's NAND Flash. The upgrade to a 286-layer stacked process is expected to significantly boost the facility's production capacity.

In 2023, the U.S. government granted Samsung Verified End User (VEU) status, allowing the company to produce NAND Flash with more than 200 layers in China. This status offers Samsung some flexibility in the face of restrictions on advanced semiconductor manufacturing equipment exports to China, enabling it to continue its cutting-edge NAND Flash production despite geopolitical tensions.

Industry experts suggest that Samsung's dual strategy—enhancing advanced NAND Flash production in both South Korea and China—demonstrates the company's efforts to maintain its competitive advantage globally. Since the second half of 2024, Samsung has been working to implement 400-layer NAND Flash production technology at its Pyeongtaek Line 1 facility in South Korea, with initial mass production potentially starting in the second half of 2025.

In its Q4 2024 earnings report, Samsung confirmed it will accelerate development of 236-layer and 286-layer NAND Flash production technologies to maintain long-term product competitiveness. However, despite these advances, Samsung expects a 25% drop in NAND Flash production in Q1 2025, with a forecasted output of 420,000 wafers per month, compared to Q4 2024. This decline is primarily due to market oversupply driven by price hikes and interest rate increases, which have led to reduced demand in mobile and PC markets. Nonetheless, demand for high-performance NAND Flash products, driven by sectors such as AI data centers, continues to rise, prompting Samsung to focus on high-capacity solutions.