Arcuri writes that there have been “big changes at Samsung,” where the company has “significantly downsized” second half orders, with its Line16 now planned as “a stripped down copper fab” with re-used tools rather than a “full-blown production fab.” He says this is part of a strategic shift in which Samsung “appears to be moving away from wholesale capacity adds” and toward a just-in-time spending approach.
Samsung keeps memory capex static
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Esther Lam, DIGITIMES, Taipei [Friday 25 July 2008]
Samsung Electronics has announced that its capex for memory production will remain static, despite only posting a mild sequential growth in operating margin from the segment for the second quarter.
Samsung will maintain its planned capex for the memory segment (both DRAM and NAND flash) at seven trillion won (US$6.9 billion) for 2008, as announced in April. Company executives said the capex set in April already factored in changes in market trends, therefore no adjustment is necessary for the time being. Capex for memory production in 2009 is still undecided as visibility remains low, the executives added, but will eventually be determined based on cash flow. Samsung stressed that its budget for next year will be adequate.
Samsung recorded bit growth for DRAM and NAND flash in the low 20% range for the second quarter, and projected growth for both segments in the third quarter in the mid-teens. With its pace on bit growth beating the industry average for the first half of 2008, Samsung said it aims to maintain this lead for the whole of the year. Memory market share growth is targeted for 1-2%.
Having seen limited recovery in memory demand in the second quarter, despite a short rebound in DRAM pricing, Samsung projected weaker demand in the third quarter due to the economic slowdown. PC demand is expected to grow by 10% on quarter at 78 million units in the third quarter, while for NAND flash applications demand is expected to be dampened, despite new product launches.
Commenting on the discrepancy in DRAM contract and spot market prices, Samsung said the situation will persist in the near-term and the gap should also widen. The executives explained the discrepancy to increasing penetration by leading PC vendors in both mature and emerging markets, which has suppressed demand from smaller-scale players at the spot market. |
