Samsung to announce mega investment plan
05-14-2010
By Kim Yoo-chul
Staff reporter
koreatimes.co.kr
Samsung Electronics, the world's biggest technology company, will announce a "massive" investment plan next week, up to the tune of about 20 trillion won ($17.7 billion), company sources said.
It would amount to the biggest ever single investment project in the company's history, as Samsung moves to meet the rising demand for televisions and mobile gadgets.
Samsung has invested about 14 trillion won to improve the capabilities at its key facilities in 2008, a Samsung spokeswoman said, Friday.
"This year's investment would set a new record," she said, saying that most of the money allotted for advancing chips and liquid crystal display (LCDs).
Samsung is the world's leading maker of flat-screen televisions, LCDs and memory chips and trails only Nokia as the No. 2 handset vendor.
Samsung earlier this year announced an 8.5 trillion won investment plan for 2010, with 5.5 trillion slated for the memory business and the remaining 3 trillion won allocated for LCDs.
However, the rising demand for parts has the company deciding it should spend more.
"The announcement will likely come Monday, possibly when Samsung Electronics Chairman Lee Kun-hee attends the ground-breaking ceremony for the company's new No. 17 line at its memory chip compound in Gyeonggi Province," said another Samsung official, who didn’t want to be named.
Recently, Toshiba, Samsung's Japanese rival in memory chips, announced plans to invest $14 trillion in the next few years to meet with the increased demand for chips driven by portable gadgets.
Park Hyun, a spokesman for Hynix Semiconductor, the runner-up memory chip maker behind Samsung, said the company will be flexible about investment plans for this year, indicating that it could spend more if market situations permit.
"Nothing has been decided yet," Park said.
Hynix investment budget for this year is about 2.3 trillion won.
In terms of LCDs, which are used in a variety of devices from televisions to mobile phones, Samsung is pressed to improve its production capabilities, especially when it's unclear whether it will get the green light by Beijing for its plans to build a $2.2 billion LCD line in southern China.
"Samsung hopes to solidify our leadership in chips and flat-screens. But there are some worries that the sectors might suffer from another oversupply," said another Samsung official.
Samsung struck a record profit in the first three months of this year on a strong contribution of its chip business.
Chips and LCDs are volatile and cyclical. Profit structures of such vendors are highly susceptible to macro-economic conditions, which also reflect consumer spending. |
