Samsung expected to invest 12.5 bil. dollars in chips this year

Samsung expected to invest 12.5 bil. dollars in chips this year. March. 08, 2017 07:03. by Dong-Jin Shin shine@donga.com.

Samsung Electronics’ capital expenditure on semiconductors this year is expected is reach 12.5 billion dollars, a market research firm said on Tuesday.

According to the U.S. research firm IC Insights on Tuesday, Samsung Electronics’ capital expenditure on semiconductors this year is expected to be 11 percent higher than last year’s. Last year, the South Korean tech giant had made an investment of 11.3 billion U.S. dollars for capital expenditure, and the memory to system LSI ratio was 8 to 2. Samsung is slated to complete its plant in Pyeongtaek with the aim of mass producing V-NAND flash memory from the middle of this year.

Industry sources say Samsung is expanding investments to cater to the prospects of steady chip market boom. Chip demand is surging along with the expansion of the Internet of Things market and launch of high-performance digital devices.

SK Hynix is also expected to make an investment of 6 billion dollars this year, which is the fourth largest volume in the world and a 14 percent increase from 2015's 5.18 billion dollars. According to analysts, SK Hynix's expansion in investment comes amid the rise of DRAM market from the second half of last year while the company also actively jumped into the 3D NAND market. The company will first embark on massive investments in infrastructure of M14 cleanroom, a part of next-generation DRAM production line. At a conference call after its January earnings announcement, SK announced that it would increase 3D NAND Flash production capability.

The world’s largest chip maker Intel is also expected to make an investment of 12 billion dollars this year, a 25 percent rise from last year. Intel's 2016 capital investment was also 31 percent up from the previous year. Since last year, Intel has been focusing on new businesses including chips for servers while promoting aggressive fitness improvements.

Intel had invested 12.75 billion dollars in research and development last year, more than four times of 2.88 billion dollars of Samsung Electronics.