Samsung Electronics Co Ltd has reportedly announced a massive investment of over $18 billion in South Korea to extend its capabilities in next-generation smartphone display and memory chip manufacturing. This new investment plan also promises to create tens of thousands of new jobs. The investment is likely to reassure the company’s supremacy in memory chip technology and help it gain record profits by the end of the current financial year.
In fact, the company spends an average of over $10 billion per year in chips, helping it to gain a competitive edge in both regional and global market. Samsung’s announcement has also been linked with the Korean government’s repeated cries for large scale businesses to make domestic investments to drive job-creation in the country. As per few online resources, Samsung is set to open up to 440,000 positions within next five years. Moreover, an investment as such can ease up stakeholder concerns over delays in strategic decision making, especially after serious allegations of corruption were charged on the group’s Vice Chairman Jay Y. Lee.
Samsung’s aggressive move in domestic market becomes more important after its recent announcement on setting up a $380 million worth plant in the U.S. Over the next couple of years, demand for NAND chips are expected to soar owing to robust adoption of high-end storage products, this, in turn, will create more growth opportunities for market players. Toshiba, Samsung and SK Hynix have committed multi-billion dollar investments in expanding their NAND output capacities. Despite such efforts, experts are anticipating a market shortage at least to persist in the current year, as new facilities will be able to make any meaningful contribution only towards the start of 2018. Samsung is planning to commit close to 14.4 trillion won to building its new Pyeongtaek NAND facility that will begin its operation, not before 2021. In addition, the company is planning to splash 6 trillion won in setting up a new semiconductor production unit in Hwaseong.
The NAND plant that it owns in the Xi’an province in China is also expected to receive an additional production line but the exact amount of investment or the time frame for it is yet to be disclosed. In recent months, South Korean firms operating the country has witnessed a sales decline or have had minimum operation expansion attributed to some political disagreements between the two nations. Nonetheless, any major crisis has not been expressed by components makers with Samsung still among top suppliers of chips and displays in China.