Samsung Electronics reported plans to invest almost $ 19 billion in the development of its semiconductor and display business in order to strengthen positions in these markets.
The largest item of expenditure will be the construction of a new enterprise for the production of NAND flash memory in the South Korean city of Pyhenhak, in which it is planned to invest 14.4 trillion won by 2021. 6 trillion corporation will send for the creation of a new semiconductor production line in Hwaseong (South Korea). Another 1 trillion won will be invested in the creation of a new South Korean factory that will focus on the manufacture of OLED displays.
Thus, Samsung will invest in the development of business in South Korea about 21.4 trillion won (18.63 billion dollars). Due to this, the company promises to create up to 440,000 new jobs in the country and provide the economy with additional growth.
According to analysts, which refers to the agency "Reuters", Samsung is ahead of competitors such as Toshiba and SK Hynix, in terms of the development of memory technology. Each year, Samsung invests more than $ 10 billion in a semiconductor business, which will soon allow the company to become a market leader.
According to preliminary data of Nomura analysts, in April-June of 2017 sales of semiconductor products brought Samsung $ 15.1 billion, while the same figure for Intel was $ 14.4 billion. In addition, experts believe that Samsung will take the first place in revenue from chips and following the results of 2017, unless it is prevented by a sudden drop in prices for memory chips in the second half of the year. It is expected that this year Samsung's semiconductor revenue will reach $ 63.6 billion, while Intel will complete the year with a $ 60.5 billion result.
Experts believe that increasing production capacity in the flash memory market can lead to too large supplies of products in early 2018, but the price crisis is unlikely, as smartphone manufacturers prefer to purchase more capacious storage devices. Demand for storage devices for cloud-based data centers and virtual reality systems will also continue to grow.
"I believe that the conditions in the NAND flash market will continue to favor suppliers by 2020," said HMC Investment analyst Greg Roh,.
In his opinion, the oversupply of supply will be temporary and limited to only weak seasonal periods.