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To: Justa Werkenstiff who wrote (30779)	6/2/1999 6:05:00 AM
From: Justa Werkenstiff	Read Replies (1) \| Respond to of 70976

Reuters take on Samsung: S.Korea Samsung Elec raising DRAM investment By Yoo Choon-sik SEOUL, June 2 (Reuters) - South Korean computer chip maker Samsung Electronics Co said on Wednesday it would spend some 50 percent more than it had originally planned this year to stay ahead on production of a next-generation product. The world's largest dynamic random access memory (DRAM) maker said it had raised this year's target for facilities investment to 3.7 trillion won ($3.12 billion), 1.2 trillion won more than earlier planned, a company spokesman said. ''Our facilities investment in the DRAM sector will mostly be focused on production facilities for 256-megabit DRAMs,'' Samsung's James Chung said. ''We expect mass-production of the 256-megabit DRAMs will start in around 2001.'' The world market for the next-generation DRAM chips had yet to open, and the increased investment was aimed at securing a leading position in the future, Chung said. Analysts said the move was timely for Samsung, which has led the world DRAM industry by making huge advance investments and opening the market. ''Considering Samsung's strategy of leading the industry, the move is timely and such an action has largely been expected,'' said Tony Jung, an analyst at SG Securities. Currently the 64-megabit product is the mainstay in the world DRAM market, although lower-capacity DRAMs are also in use. Along with central process units or CPU chips, DRAM chips form the ''brain'' of personal computers. Samsung's Chung said the investment was not intended to expand production capacity for existing memory chips and that some of the money would be used to upgrade production facilities for other products including telecommunications equipment. Analysts also said Samsung's increased investment was unlikely to have a major direct impact on the current world DRAM market, which is gradually emerging from years of oversupply. ''DRAM makers had kept reducing capacity investment for the past several years and I don't think Samsung's move will have any immediate impact,'' said Jung of SG. Japan's largest chipmaker NEC Corp announced last week a plan to spend 40 billion yen ($325 million) to boost DRAM chips output, mainly at its British plant. That move was also not expected to have a major impact on the market's supply-demand situation. An NEC spokesman said: ''The investment in DRAM facilities at this time means we are not retreating from the front line.'' Samsung's Chung said the company had decided to leave unchanged its spending plan for research and development activities at 1.6 trillion won. The company announced earlier this month that its sales in the first quarter of this year totalled some six trillion won. It did not give comparative figures for last year. It has also raised its sales target for all of this year to 22.3 trillion won from 21.2 trillion won, compared with last year's 20.08 trillion won. Samsung shares closed Wednesday's trading at 90,300 won per share, up 5,000 won or 5.9 percent on the day.