Samsung weighs moving legacy memory backend work to Vietnam to free up capacity for HBM

Samsung Electronics is considering relocating part of its general-purpose DRAM and NAND packaging and testing operations from its Cheonan and Onyang sites in South Korea to Vietnam, according to industry sources familiar with the matter. The move is aimed at freeing up domestic backend capacity to support the company’s aggressive expansion in high-bandwidth memory (HBM), a critical component for AI accelerators and data center servers.

The potential shift underscores the intensifying competition in the advanced memory segment, where Samsung, SK Hynix, and Micron are racing to meet surging demand from hyperscale cloud providers and AI chip developers. HBM production requires significantly more backend capacity than conventional memory, particularly in advanced packaging and testing, which are now among the most constrained steps in the memory supply chain.

Samsung’s Cheonan and Onyang facilities in South Chungcheong Province currently handle a substantial portion of the company’s legacy DRAM and NAND backend processes. By migrating these mature product lines to Vietnam, where Samsung already operates large-scale semiconductor assembly and testing plants, the company could reallocate cleanroom space, equipment, and skilled personnel toward HBM packaging lines. Industry observers note that Vietnam offers competitive labor costs and established infrastructure for backend operations, making it a viable destination for legacy memory production.

The plan, if finalized, would mark one of the most significant relocations of memory backend capacity by a major chipmaker in recent years. It also reflects a broader trend among memory manufacturers to optimize their domestic fabs for high-value products while shifting commodity-grade output to overseas facilities. Analysts say such moves are becoming necessary as HBM demand continues to outpace supply, with major AI chip designers already securing multi-year supply agreements with memory vendors.

While Samsung has not officially confirmed the timeline or scope of the potential transfer, sources suggest the company is evaluating the move as part of its mid-term capacity planning. The shift could also help Samsung improve cost efficiency in its legacy memory business, which has faced margin pressure amid volatile memory prices. However, the company is expected to maintain sufficient domestic backend capacity to support next-generation memory technologies, including DDR5 and future HBM generations.

The potential relocation comes at a time when the global memory market is experiencing a structural shift toward AI-driven demand, with HBM and high-density DDR5 modules commanding premium pricing. For Samsung, freeing up backend capacity for HBM is not just a logistical decision but a strategic imperative to defend its leadership position in the AI memory segment against rivals who are also expanding their advanced packaging capabilities.