Samsung to upgrade memory chip production

Samsung said that it will spend about $788 million to upgrade its memory chip production lines and increase the number of chips it can produce.

The news comes as demand for several types of memory chips is increasing. Hewlett-Packard (HPQ) CEO Mark Hurd said last week that tightening supplies of DRAM were expected to result in higher prices and pinched PC margins in the coming weeks. On the flash memory front, Intel (INTC) and SanDisk (SNDK) have both recently said they see NAND flash supplies tightening and prices firming.

Samsung, the world's top manufacturer of NAND flash memory, did not specify what type of memory it will produce with its upgraded facilities. It said in a filing with the Korea Exchange that it will make the investment this year to meet demand and improve its cost competitiveness.

Memory, particularly NAND flash, continues to be a hyper-competitive environment. Samsung is facing off against other alliances including one between Intel and Micron Technology (MU), and another between SanDisk and Toshiba.