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Samsung invests $18.6 billion in South Korea

by on04 July 2017

Needs more memory and smartphone displays

Samsung is to invest $18.6 billion in South Korea as part of a cunning plan to extend its lead in memory chips and next-generation smartphone displays.

The move is expected to create almost half a million jobs by 2021. Normally it  invests more than $10 billion in chips annually, helping it stay ahead of competitors such as cross-town rival SK Hynix and Toshiba.

The huge investment is also likely to alleviate shareholder fears of major decisions being delayed in the absence of Vice Chairman Jay Y. Lee. The leader of the Samsung Group is on trial charged with bribing former president Park Geun-hye for political favors.

Under its latest spending plan, Samsung will put 14.4 trillion won into its new NAND factory in Pyeongtaek by 2021. It will invest six trillion won in a new semiconductor production line in Hwaseong, but did not elaborate on timing or product.

Some analysts said additional capacity across the industry could cause slight oversupply in early 2018, but that prices are unlikely to drop because demand is so strong.

Samsung also said it will add a production line to its NAND plant in Xi'an, China, though it has not yet set an investment amount or time frame.

China is trying to develop its own memory chip producers but it is likely to take several years before they can compete with existing makers, analysts said.

Samsung said Samsung Display plans to invest around one trillion won on a new organic light-emitting diode (OLED) display complex in South Korea.

The unit controls over 90 percent of the market for OLED smartphone screens, and is widely expected to add production lines to cope with demand from phone makers such as Apple Inc (AAPL.O).

Last modified on 04 July 2017
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