Samsung to invest $9.6 billion annually in logic chips

SEOUL (Reuters): Samsung Electronics plans to invest 11 trillion won ($9.57 billion) annually through 2030 in logic chip businesses, including its foundry business, and expects the move to help create 15,000 jobs over the period.

The total investment of around 133 trillion won comes at a time when the world’s top memory chip maker is strengthening its non-memory semiconductor businesses such as contract chip manufacturing, known as foundry, and mobile processors.

Although Samsung does not disclose the breakdown of its investment in the semiconductor division, analysts say it has annually spent about as much as 10 trillion won in memory chips, Samsung’s major income earner.

“Samsung appears to be aggressive on non-memory side given the size of the spending, but it is too early to tell whether this long-term plan will work out because it depends a lot on the demand situation and market conditions,” Song Myung-sup, a senior analyst at HI Investment & Securities said.

The South Korean tech giant, which currently employs around 100,000 people locally, said it will spend 60 trillion won on production infrastructure and the rest on domestic R&D.

“The investment plan is expected to help the company to reach its goal of becoming the world leader in not only memory semiconductors but also logic chips by 2030,” Samsung said.

With a 19 percent market share, Samsung is ranked No.2 in the foundry sector, trailing market champion Taiwan’s TSMC, according to industry tracker TrendForce.

Samsung also produces Exynos mobile processor chips used in its mobile phones.

The South Korean government is preparing for its own support program for the non-memory chip sector, an official at the industry ministry said, without giving further details.

The government’s announcement could come later this month, according to local media reports.