By Kim Yoo-chul
Samsung Electronics plans to slightly increase its investments in key facilities, though it's under pressure to cut costs amid falling profitability of its crucial smartphone business.
"Although Samsung has steadily been asked to tighten its belt under very challenging business situations, making investments in order to strengthen our competitiveness in key businesses is an issue on which there can be no compromise," said an official at the company.
"Samsung expects to invest as much as 40 trillion won this year, including about 25 trillion won on facilities and 15 trillion won for research and development (R&D)," said the official. Samsung invested 14 trillion won on R&D last year, according to the company.
This is a slight increase in spending from last year. Last year, Samsung invested some 38.7 trillion won on facilities and research projects.
Samsung said that it plans to invest 14.4 trillion won throughout this year for semiconductors, followed by 4.9 trillion won for displays.
But Samsung officials said it is likely that the firm may increase its spending on memory chips as the global chip industry experiences tight supply and limited capacity growth.
This year's total Samsung Electronics investment will account for 80 percent of projected spending for the entire conglomerate. Samsung Group of affiliates plans to invest 50 trillion won, said a spokesman at the Samsung Future Strategy Office, a key decision-making body for the conglomerate.
Most of the spending by Samsung Electronics will be focused on memory chips as Samsung's corporate DNA lies in chips.
The company has been consistent in increasing its spending for business areas that it can effectively handle to offset worries over its corporate sustainability as Samsung realized a "vertically-integrated" corporate structure between finished goods and components.
"While our smartphone business is being challenged, Samsung believes the semiconductor business can offset the effects of falling profitability in handsets. More than a 75 percent portion of the total investment by Samsung Electronics this year will be allocated for the memory chip business," said another Samsung official.
In a recent conference call to investors, Samsung's investor relations office chief Robert Yi said it will delay the addition of a logic chip-manufacturing line to next year because the company is hoping to generate more profit by riding on the favorable memory chip market conditions.
Samsung's logic chip division, which manufactures processors ― the component used in powering computing devices such as smartphones and tablets ― has been struggling as it fails to find logic chip buyers.
"We will put more focus on DRAM and NAND flash memory chips," said Yi of Samsung.
Samsung also plans to invest more on flexible displays.
"Rather than spending more for dividends, Samsung will be aggressive for investments on parts and components to further strengthen its competitiveness," said the official.
Samsung Electronics plans to slightly increase its investments in key facilities, though it's under pressure to cut costs amid falling profitability of its crucial smartphone business.
"Although Samsung has steadily been asked to tighten its belt under very challenging business situations, making investments in order to strengthen our competitiveness in key businesses is an issue on which there can be no compromise," said an official at the company.
"Samsung expects to invest as much as 40 trillion won this year, including about 25 trillion won on facilities and 15 trillion won for research and development (R&D)," said the official. Samsung invested 14 trillion won on R&D last year, according to the company.
This is a slight increase in spending from last year. Last year, Samsung invested some 38.7 trillion won on facilities and research projects.
Samsung said that it plans to invest 14.4 trillion won throughout this year for semiconductors, followed by 4.9 trillion won for displays.
But Samsung officials said it is likely that the firm may increase its spending on memory chips as the global chip industry experiences tight supply and limited capacity growth.
This year's total Samsung Electronics investment will account for 80 percent of projected spending for the entire conglomerate. Samsung Group of affiliates plans to invest 50 trillion won, said a spokesman at the Samsung Future Strategy Office, a key decision-making body for the conglomerate.
Most of the spending by Samsung Electronics will be focused on memory chips as Samsung's corporate DNA lies in chips.
The company has been consistent in increasing its spending for business areas that it can effectively handle to offset worries over its corporate sustainability as Samsung realized a "vertically-integrated" corporate structure between finished goods and components.
"While our smartphone business is being challenged, Samsung believes the semiconductor business can offset the effects of falling profitability in handsets. More than a 75 percent portion of the total investment by Samsung Electronics this year will be allocated for the memory chip business," said another Samsung official.
In a recent conference call to investors, Samsung's investor relations office chief Robert Yi said it will delay the addition of a logic chip-manufacturing line to next year because the company is hoping to generate more profit by riding on the favorable memory chip market conditions.
Samsung's logic chip division, which manufactures processors ― the component used in powering computing devices such as smartphones and tablets ― has been struggling as it fails to find logic chip buyers.
"We will put more focus on DRAM and NAND flash memory chips," said Yi of Samsung.
Samsung also plans to invest more on flexible displays.
"Rather than spending more for dividends, Samsung will be aggressive for investments on parts and components to further strengthen its competitiveness," said the official.
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