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Strategies & Market Trends : Technical analysis for shorts & longs

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Dec 26 4:00 PM EST

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To: Logain Ablar who wrote (42694)	10/10/2005 11:49:04 PM
From: Johnny Canuck	Read Replies (1) of 69278

Samsung's big spend is a slow down, says Gartner Peter Clarke EE Times (10/10/2005 12:25 PM EDT) LONDON — Samsung Electronics Co. Ltd. recently announced plans to spend $33 billion on wafer fabs over the next seven years (see Sept. 29 story) but analyst firm Gartner has said this marks a comparative spending slow-down. Samsung is planning to build eight fabrication lines at Hwaseong, South Korea. Although Samsung is increasing its spending in absolute terms, as a proportion of Samsung’s projected revenues the Korean giant’s spending is declining and moving closer to the industry average, according to a note written by Klaus Rinnen, Gartner managing vice president. For the past seven years, Samsung’s ratio of capital- expenditure to semiconductor-revenue has been 10 percentage points above the industry average, Gartner estimated. But the company forecast that during the next seven years it would decline to just 2 percentage points above the average. Thus, despite the high level of planned investment, Samsung's rate of investment compared with the industry average is slowing. “We believe this means that Samsung won't be able to grow as aggressively as it has in the past seven years. The company is maturing as a semiconductor player, and the slowdown in investment is a natural step in its evolution in the marketplace,” said Rinnen in his note. “Though these impressive investment plans underline its strong commitment, they will likely not be enough to enable Samsung to challenge Intel for the number one position,” Rinnen concluded.

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