Samsung Electronics Co. Chairman Lee Jae-yong (center) tours the company's chip plant in Cheonan, South Chungcheong Province, on a Sunday on Feb. 17 2019. (Samsung Electronics)

Samsung Electronics Co. will expand its semiconductor package facilities in South Chungcheong Province to boost production of high bandwidth memory chips, company officials said Tuesday.

Under a memorandum of understanding with the provincial government, Samsung Electronics will convert an underused liquid crystal display plant owned by Samsung Display Co. in Cheonan, some 85 kilometers south of Seoul, into a semiconductor fabrication plant, according to the officials.

The new facilities, expected to be completed by December 2027, will feature advanced packaging lines for HBM chips, which are in high demand due to their essential role in AI computing.

Packaging is a critical stage of the semiconductor manufacturing process that protects the chip from mechanical and chemical damage.

Samsung Electronics expects the upgraded facilities in Cheonan will help the company regain a competitive edge in the global semiconductor market.

The world's largest memory chipmaker has apparently fallen behind its local rival SK hynix Inc. in the HBM segment.

Samsung Electronics' plans to supply its latest fifth-generation HBM3E products to Nvidia Corp. have been delayed due to quality concerns. (Yonhap)