Samsung has no plan to cut investment in chips this year

Samsung Electronics indicated it has no plan to cut investment in chips this year, Reuters news report said.
Samsung 5G base stationsSamsung said capital spending in 2023 would be similar to 2022. Capex of Samsung reached KRW 53.1 trillion in 2022, including KRW 47.9 trillion for semiconductors and KRW 2.5 trillion for displays.

This compares with Samsung’s capital expenditures of KRW 48.2 trillion in 2021, including KRW 43.6 trillion for semiconductors and KRW 2.6 trillion for displays.

Samsung earlier revealed its capital expenditures in the fourth quarter of 2022 were KRW 20.2 trillion, with KRW 18.8 trillion in semiconductors and KRW 0.4 trillion in displays.

“Samsung might be seeing this time as a good opportunity to increase market share, which should help it in the long term, at the expense of SK Hynix and Micron,” said analyst Choi Yoo-june at Shinhan Securities.

Greg Roh, head of research at Hyundai Motor Securities, estimated Samsung’s market share may reach the upper 40 percent range for DRAM chips and mid-30 percent range for NAND flash memory chips in the second half of the year, from around 43 percent and 32 percent.

Samsung signaled it would curb short-term production organically through line maintenance, equipment adjustment and moving to advanced chip-making processes. It also said it would increase the proportion of capital investment that goes into research and development.

“Samsung, in a roundabout way, is saying production will decrease slightly,” said analyst Kim Yang-jae at Daol Investment and Securities. “However, investors were hoping for a stronger production cut, or a comment about faster market rebound – so its shares fell.”

Rivals such as SK Hynix, and Taiwan Semiconductor Manufacturing (TSMC) have also announced a spending cut.

Sluggish demand and inventory adjustment will continue to impact the chip business in the first quarter, while smartphone demand is likely to decline year-on-year due to economic slowdown in major regions, Samsung said.