Samsung Electronics Co., which aims to become the world’s largest semiconductor producer, will make the biggest ever investment in facilities this year. The company is expected to invest 24.5 trillion won (US$21.95 billion), up more than 10 trillion won (US$8.96 billion) from the previous year.
Shinhan Investment Corp. announced on May 16 that Samsung Electronics’ investments in semiconductor facilities (CAPEX) will reach 24.5 trillion won (US$21.95 billion) this year, showing an 85.6 percent increase compared to last year. The figure is 980 million won (US$878,136) bigger than 14.7 trillion won (US$13.17 billion) in 2015, the biggest of all time.
Choi Do-yeon, a researcher at Shinhan Investment, predicted that Samsung would invest 12.05 trillion won (US$10.8 billion) in NAND flash memory chips whose prices are recently increasing due to a short supply and 8 trillion won (US$7.17 billion) in the non-memory chip sector, including foundry. He said, “It is an opportunity for Samsung, which has outplayed late starters with its 3D NAND mass production technology, to expand its market share in the medium and long term with new investment. The investment will go on for its Fab 18 two layers line in Pyeongtaek and new second Fab facility in Xian, China. It means that Samsung Electronics is making a successive investment in 3D NAND after the current investment in the first floor of the Fab 18 line in Pyeongtaek.
In this regard, an official from Samsung Electronics said, “We haven’t confirmed our investment plans this year since there are a lot of variables in terms of business. But, we expect that the investment will increase compared to last year.” Samsung Electronics made a total of 9.82 trillion won (US$8.8 billion) of investment in facilities in the first quarter alone, including 5.02 trillion won (US$4.5 billion) in semiconductors and 4.17 trillion won (US$3.73 billion) in displays.
Industry sources expect that Samsung Electronics will become the number one semiconductor business in the world this year by strengthening the investment in memory chips which are going up in price. According to market research firm IC Insights, Samsung Electronics recorded US$13.6 billion (15.18 trillion won) in sales in the semiconductor sector in the first quarter of this year, narrowing the gap with Intel to as low as US$600 million (669.6 billion won). In addition, the company is expected to beat out Intel in the second quarter.