Thursday, September 29, 2005

Samsung makes big investment in semi-conductors

by Brian Turner

South Korea’s Samsung Electronics announced on Thursday that it will spend $33 billion in the next 7 years on a new research center and production lines in an attempt to meet higher demand for semiconductors.

The plan comes at a time when Samsung’s non-semiconductor business are seeing prices fall, and the company is looking to increase production capacity for its more profitable semiconductor business.

The new investment will be sued to build a research and development line and eight new fabrication lines, four of which will produce 300mm or larger wafer units. The new lines will be built at Samsung’s existing plant in Hwasung, south of Seoul.

Samsung expects that the new capacity will nearly quadruple semiconductor revenues, from $16.28 billion last year to around $61 billion in 2012.

Profits were down 46 percent in the second quarter of this year, pulled lower by falling prices on flat-panel displays and handsets.

Semiconductors accounted for nearly 70 percent of the company’s operating profit in the quarter, at Won1,100 billion ($1.1 billion). Samsung hopes that this new investment will help it extend its lead over its rivals in the sector.

 

 

 

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