Samsung reported 50% capex cut dampens memory outlook, but lifts pressure on competition
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Josephine Lien, Taipei; Jessie Shen, DIGITIMES [Tuesday 6 January 2009]
A recently-reported slash in capex for 2009 by Samsung Electronics has raised concerns among market watchers that a deceleration in the growth of the global memory market may become even more severe than expected this year. However, the memory chip maker's capex cuts will reduce the pressure on its competitors, which are struggling from overcapacity and falling chip prices.
Samsung is looking to halve its investment in semiconductor chips to 2-3 trillion won (US$2 billion) for 2009, The Korea Times recently quoted unnamed company sources as indicating. The move paints a gloomy outlook for various consumer electronics segments in 2009 as the vendor has expertise in a wide range of key segments including memory chips, LCD panels and handsets.
Samsung's executive vice president of investor relations Chu Woo Sik was quoted in a Reuters report as denying the The Korea Times report, but saying that the company's overall capex for 2009 may be downgraded if necessary. A decision on investment plans for 2009 has not yet been made, Chu was quoted as saying.
Unnamed DRAM makers commented that Samsung's capital spending was actually above the average in 2007 and 2008, when it reached US$6.1 billion and an estimated US$7 billion, respectively. Although Samsung's reported investment of only US$2 billion delivers a bleak forecast for 2009, the move is in line with capex cutbacks by its rivals. This implies that a consensus toward refining capital and improving operational efficiency has been reached among memory makers as they prepare to confront slashed investor and consumer confidence over the coming year, according to the makers. |
