Samsung Plans Massive Investment in Non-Memory Chips

  • By Kang Dong-cheol, Lee Ki-moon

    April 25, 2019 09:23

    Samsung on Wednesday announced plans to invest W133 trillion over the next 12 years to become the world's No. 1 manufacturer of non-memory chips (US$1=W1,150).

    That breaks down into W11 trillion annually, about double the amount of Samsung's spending on memory chips.

    The electronics giant is expected to hire around 15,000 workers to beef up its non-memory business. The bulk will focus on foundries and system large-scale integration (LSI).

    Samsung is the world's largest memory chip maker but not even in the top 10 in the non-memory sector. Non-memory chips are being used in an increasing range of applications from TVs to washing machines and constitute the core technology of self-driving cars, robots and drones. The non-memory market is twice the size of the memory market.

    Samsung worries that it could end up being sidelined in the global technology race due to its weak presence in the non-memory market.

    The memory market has been floundering this year as prices plummeted due to declining demand, and Samsung and SK Hynix earnings have fallen this year. Also, the U.S. is bolstering red tape against Samsung, which controls more than 40 percent of the global market. It could be hit with punitive tariffs if it expands its operations further.

    Making matters worse, rivals in China are catching up quickly backed by government support. Industry watchers say Samsung still has an edge in terms of technology, but time is running out.

    But the market for non-memory chips is growing quickly. Intel, Qualcomm, Facebook, Google, Amazon and Alibaba are going all out to develop non-memory semiconductors, including for self-driving cars and artificial intelligence.

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