Samsung Faces Stiff Competition both at Low and High End Markets

Seoul based tech giant; Samsung claimed today that it was planning to invest at least $19 billion during the next four years within the memory chip and display plants within South Korean cities including Pyeongtaek and Hwaseong.

Investing in Production Facilities

This statement came in the midst of the massive boom in chip sales after a surge in demand. Tech firms have been increasing their data centers and servers in order to increase data from mobile devices and motor vehicles as well as expectations that increased dependence on artificial intelligence means would mean more demand for data handling operations.

Samsung is also planning to expand the NAND chip plant within Xian in order to meet the demand for chips utilized within high end storage products it claimed. It did not give an explanation pertaining to the amount of money it planned to invest in this plant though.

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The tech giant also claimed it was planning to spend an additional 12.5 billion dollars meant to increase capacity as concerns the memory chip factory in Pyeongtaek. The firm claimed the chip plant which broke ground two years ago is currently one of the most significant semiconductor production lines in the world.

This will come along with an additional injection of $5.2 billion in its memory chip cluster within Hwaseong. $871 million will also go to the display factory in Asan that makes OLED screens for mobile devices.

The OLED screens are utilized for the high end Galaxy smart-phones. These displays have created the avenue for Samsung to distinguish its devices from that of the competition with curved iterations. Samsung is currently the dominant supplier for the OLED screens for devices and this is one of its most lucrative operations.

Samsung Faces Stiff Competition both at Low and High End Markets

Though all of this represents accelerated growth for the tech giant, it is not to say that everything is smooth sailing. Within the Smartphone market, Samsung is increasingly becoming sandwiched by smaller Chinese rivals within the mid-end and low markets it also faces stiff competition from Apple’s iPhone when it comes to the high end segment.

Samsung has also incidentally suffered image hits because of the humiliating recall in the previous year of the Note 7 and related explosion reports. The firm managed to post steady profits in part because of the developing chip market which does not only supply its on handset unit but also to other giants in the mobile device market such as Apple. Samsung currently accounts for at least 40 percent of the memory chip sales globally as of the recently concluded quarter and posted its biggest net profit yet as of the past three years.

It said in a statement that it plans to actively react to the growing demand by making aggressive demands on their production lines both at home and abroad. The global shortage of chips though could drive the prices high which is a benefit to Samsung as it could drive their profits even higher in the coming financial periods, thus permanently unseating Intel as the leading chip maker and this is evident as it continues its investment in production facilities.

Samsung concluded by claiming the investment on the plants would eventually lead to the creation of up to 440,000 jobs through to 2021 which will have a stimulating effect on the economy as well.

[See More: Samsung Takes Over Intel to Become Number One Chip Maker]

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