One of the world’s top makers of smartphones, Samsung Electronics, said on Tuesday it will invest at least $18.6 billion in South Korea to extend its lead in memory chips and next-generation smartphone markets. It will also invest 20.4 trillion won ($17.7 billion) by 2021 to expand and upgrade its chip plants in the South Korean cities of Pyeongtaek and Hwaseong, it said in a statement.
The investment indicates Samsung’s determination to widen its lead in the memory chip segment.
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Samsung accounted for more than 40% of global memory chip sales in the first quarter of this year – posted, in April, its biggest quarterly net profit in more than three years. Annually it invests more than $10 billion in chips to stay ahead of its competitors.
Due to increase in demand for chips globally for high-tech gadgets, Samsung said: “Our clients are having difficulty in securing enough semiconductor chips”. To respond to all that demand, the company is aggressively investing in production lines at home and abroad.
Samsung also plans to expand its NAND chip plant in the Chinese city of Xian due to the increasing demand for the chips used in high-end storage products; though no information on how and when the Company plans to invest is detailed.
Due to huge demand, there might be a shortage of chips through 2017, which will increase the price, benefiting major suppliers such as Samsung and one other South Korean chipmaker, SK Hynix. According to market researcher IC Insights – the average price for DRAM chips and NAND flag chips are expected to increase by 53 percent and 28 percent respectively this year.
Samsung said its huge investment will eventually give way to more than 440,000 jobs by 2021, including indirectly.