Sam­sung to in­vest $18 bn in mem­ory chip busi­ness

Kuwait Times - - BUSINESS -

Sam­sung Elec­tron­ics will in­vest nearly $18 bil­lion in its chip busi­ness, the South Korean firm said yes­ter­day, as it seeks to ex­pand its lead in the global mem­ory chip and smart­phone mar­kets. The world's top maker of smart­phones and mem­ory chips will in­vest 20.4 tril­lion won ($17.7 bil­lion) by 2021 to ex­pand and up­grade its chip plants in the South Korean cities of Pyeong­taek and Hwaseong, it said in a state­ment.

The fac­tory in Pyeong­taek, 70 kilo­me­ters south of Seoul, is the world's big­gest and has re­cently started pro­duc­tion af­ter Sam­sung Elec­tron­ics spent 15.6 tril­lion won over the past two years to build it. The com­pany also plans to ex­pand its NAND chip plant in the Chi­nese city of Xian to meet boom­ing de­mand for the chips used in high-end stor­age prod­ucts, it said. It did not elab­o­rate on when and how much money it plans to in­vest there. In smart­phones, Sam­sung has been in­creas­ingly sand­wiched by smaller Chi­nese ri­vals in the low and mid-end mar­kets, and by Ap­ple's iPhone in the high-end seg­ment.

Sam­sung-which ac­counted for more than 40 per­cent of global mem­ory chip sales in the first quar­ter of this year-posted in April its big­gest quar­terly net profit in more than three years. "Our clients are hav­ing dif­fi­culty se­cur­ing enough semi­con­duc­tor chips due to grow­ing global de­mand for high-tech gadgets," it said. "We plan to ac­tively re­spond to those de­mands by mak­ing ag­gres­sive in­vest­ments on our pro­duc­tion lines at home and abroad," it said.

An­a­lysts say a global short­age of chips may per­sist through­out 2017, driv­ing prices higher and ben­e­fit­ing ma­jor sup­pli­ers such as Sam­sung and an­other South Korean chip­maker, SK Hynix. Av­er­age prices for DRAM chips used in PCs and servers, and NAND flash chips used in hand­sets are ex­pected to jump 53 per­cent and 28 per­cent re­spec­tively this year, ac­cord­ing to mar­ket re­searcher IC In­sights. The an­nounce­ment also came af­ter newly elected South Korean Pres­i­dent Moon Jae-In set tack­ling ris­ing un­em­ploy­ment as his top pri­or­ity. Sam­sung said its in­vest­ment would even­tu­ally help cre­ate as many as 440,000 jobs through 2021, in­clud­ing in­di­rectly, and help bol­ster Asia's fourth-largest econ­omy.

Sam­sung to sell re­cy­cled Note 7

Else­where Sam­sung Elec­tron­ics plans to re­cy­cle and sell its re­called Galaxy Note 7 phones start­ing this week in South Korea, sal­vaging their un­used parts. The Galaxy Note FE phone will go on sale in South Korea on Fri­day at 700,000 won ($611), about three quar­ters of its orig­i­nal price, the com­pany said late Sun­day.

Sam­sung said the Note FE has "per­fect safety" - un­like the re­called ver­sions that were found to be prone to over­heat­ing and catch­ing fire. The sup­ply will be lim­ited to 400,000 units. Over­seas sales plans will be de­ter­mined later, the com­pany said in a state­ment. The orig­i­nal Note 7 was one of the big­gest black eyes in Sam­sung's his­tory. When it was launched in Au­gust 2016, the Note 7 was Sam­sung's an­swer to Ap­ple's up­com­ing iPhone. It was also one of the most ex­pen­sive Sam­sung phones with the price start­ing at $850. Af­ter re­ports emerged that its bat­ter­ies were prone to over­heat and catch fire, Sam­sung re­called the phone in less than a month of its launch and re­leased an­other one with re­placed bat­ter­ies. The sec­ond batch also tended to over­heat, prompt­ing Sam­sung to dis­con­tinue the Note 7.

The de­ba­cle dealt a blow to Sam­sung's cor­po­rate im­age. Avi­a­tion au­thor­i­ties around the world banned the pricy phone on flight and pho­tos of scorched Note 7 cir­cu­lated on so­cial me­dia. Sam­sung spent bil­lions of dol­lars to re­call the Note 7 and fix its dam­aged brand. The com­pany re­leased in­ves­ti­ga­tion re­sults that blamed flaws in de­sign and pro­duc­tion of bat­ter­ies sup­plied by two bat­tery mak­ers.

Af­ter the re­call of mil­lions of Note 7 phones, en­vi­ron­men­tal ac­tivists have pres­sured the South Korean tech gi­ant to re­use the elec­tron­ics parts to re­duce waste. Sam­sung said the Note FE is part of its ef­fort to min­i­mize waste. Like the pre­vi­ous Note se­ries, the Note FE, short for "Fan Edi­tion," fea­tures a jumbo screen mea­sur­ing 5.7 inches (14.48 cen­time­ters) di­ag­o­nally and a sty­lus. — Agen­cies

PYEONG­TAEK, South Korea: This un­dated handout ae­rial photo pro­vided by Sam­sung Elec­tron­ics yes­ter­day shows its new semi­con­duc­tor plant. — AFP

Newspapers in English

Newspapers from Kuwait

© PressReader. All rights reserved.