Samsung to Outsource More DDR5 and SSD Production to Free Capacity for HBM

The company is directing capacity growth for DDR5 modules and SSDs toward external firms, industry sources told TechRadar. A person familiar with the matter said Samsung lacks space to expand existing back-end lines needed to manufacture AI semiconductors, so it is reallocating space and equipment at packaging plants in Cheonan and Onyang to advanced packaging lines including HBM. The person said Samsung has decided to handle most increases in conventional memory module production through outsourcing rather than expanding its own capacity.

Samsung has asked outsourced semiconductor assembly and test partners to expand capacity for DDR5 modules and SSDs, according to the report. It has also asked partners to accelerate capacity expansions that were already part of its existing plans. Several partners are scaling up in response, including Dreamtech, Hanyang Digitech and SFA Semicon.

Dreamtech began mass producing DDR5 modules in India last November and approved further equipment investment in June, according to TechRadar. Its Noida facility, previously used for smartphone circuit board assembly, will eventually reach an annual capacity of more than 50 million units. Hanyang Digitech has invested more than 31.5 billion won in 2026 so far to automate its existing memory module plant in Vietnam. SFA Semicon is relocating DDR5 testing and assembly equipment from Samsung's Onyang campus to a new site in the Philippines. That transition begins in November, with a second phase following in the second quarter of 2027.

Samsung's own capacity constraints stem partly from a new HBM plant under construction at its Onyang campus, valued at 6 trillion won, according to the report. That facility will take multiple years to finish, leaving little room for conventional module expansion in the meantime. A separate $1.5 billion back-end processing plant is also under construction in Thai Nguyen Province of northern Vietnam. That facility will handle testing for older memory types, including DDR4, low-power LPDDR4, NAND flash and universal flash storage.

DDR5 modules require mounting prepackaged DRAM and NAND chips onto circuit boards using surface-mount technology, the report said. That process remains considerably less complex than the advanced packaging methods used for HBM, making outsourcing comparatively straightforward for partners. Micron previously pursued a similar route, shifting conventional memory production externally while concentrating internal resources on higher-margin products. Whether SanDisk eventually follows a comparable path remains uncertain given how differently each company's manufacturing footprint and product mix are currently structured, according to TechRadar.