In a strategic financial move to bolster its semiconductor production capabilities, Samsung Electronics is seeking a substantial loan from the Korea Development Bank (KDB). According to Korean media reports, the tech giant is in the final stages of negotiating a loan of up to 50 trillion won, which equates to approximately $3.6 billion. This loan is intended to support Samsung's ambitious projects to build additional chip production facilities both domestically and internationally.

The loan is a component of a broader government initiative that will see a 170 trillion won ($136 billion) low-interest loan program implemented from next month, specifically designed to support the growth and development of South Korea's semiconductor industry. It is noteworthy that SK Hynix is also contemplating a loan of up to 30 trillion won from KDB for its chip investments.

Historically operating without borrowing, Samsung has recently pivoted its management approach due to the substantial capital required to compete in the burgeoning AI chip market against rivals such as TSMC. In addition to the loan, Samsung is also considering issuing corporate bonds in South Korea and abroad to raise further funds.

The funds raised from the KDB loan and potential corporate bonds will be directed towards the construction of state-of-the-art chip facilities both within South Korea and overseas. Since 2022, Samsung has been developing a chip factory in Pyeongtaek, Gyeonggi Province, with a total cost of around 200 trillion won. The company has already established three advanced DRAM and NAND chip factories, as well as a contract chip factory, within its Pyeongtaek Complex.

Furthermore, Samsung is investing $17 billion in the construction of an advanced contract chip factory in Taylor, Texas, USA. The company is locked in a fierce competition with TSMC for the leadership position in global wafer foundry services and is actively expanding its U.S. manufacturing presence.

In the realm of High Bandwidth Memory (HBM) research and development, Samsung is also facing stiff competition from SK Hynix. This financial move underscores Samsung's commitment to maintaining its competitive edge in the global semiconductor market and its ongoing efforts to invest in cutting-edge technology.