Samsung has started operations at a new flash memory chip line, in a move which could force smaller rivals out of business.
The South Korean firm said that the manufacturing plant near the capital Seoul, was the industry’s largest and most advanced memory fabrication facility producing chips with 20 nanometre class processing technology.
This reduction in size has enabled Samsung to make a huge 50 per cent cost saving which will hopefully be passed on to the consumer.
As well as making them cheaper, the lower line-widths processing technology will allow for more circuits on a chip, making them smaller, more powerful and more energy efficient.
Samsung is currently the world’s number one memory chip maker, in part due to it’s largest customer, Apple. However, with the two companies fighting legal battles across the globe, that relationship may change in the coming months and could leave Samsung looking for a new best friend. Then again, if Samsung can pass on the savings to its customers, it’s unlikely Apple will be going anywhere.
While Samsung is competing against companies like fellow-South Korean Hynix Semiconductor Inc and Japan’s Elpida Memory Inc and Taiwan's Powerchip, this move is set to have a much bigger effect on smaller chip makers.
These could be squeezed out of the market as falling prices, worsening margins and weak demand combine to make it tough for them to invest in expensive facility upgrades.
Samsung invested 12 trillion won (£6.5 billion) in construction of the new facility in Hwaseong, south of Seoul, since it started construction in May last year.
With the demand for smartphones and tablets unlikely to abate in the coming years, cheaper flash memory like this could mean reduced prices for manufacturers which will hopefully trickle down to us consumers.