Samsung has announced that it would be spending a whopping 27 trillion won (approximately 24 billion US dollars) in semiconductors and displays this year.
It’s true that Samsung has been steadily increasing the amount of money it’s investing in production facilities. In 2010, it was 21 trillion won, and the figure’s been going up by a trillion or so each year, and this year’s expected sum is the highest yet.
It looks like the two major investments will be in V-NAND flash memory chips and flexible OLED displays. Samsung is said to be investing 13.2 trillion won in the production of V-NAND chips, which are used for business servers that handle large amounts of data. The South Korean company will spend 10.9 trillion won for OLED displays – that is more than twice the sum that Samsung invested in displays last year.
The demand for V-NAND flash memory chips has been increasing steadily, and as for OLED displays, many analysts predict that there will be a major boom in OLED consumption next year. Apple and Chinese OEMs are expected to play a huge role, and with VR becoming more and more mainstream, OLED displays are bound to become the norm. Given all this, V-NAND and OLED technologies are low-risk areas where Samsung can safely expect to see market dominance.
V-NAND and OLED technologies are low-risk areas where Samsung can safely expect to see market dominance.
The company also reported that its Q3 operating profit dropped by almost 30 percent year-over-year, and its revenue fell by around 7 percent. Given the Galaxy Note 7 fiasco and the subsequent decline in Q3 earnings, and given the surging demand for chips and OLED displays, Samsung’s move to invest such a substantial amount of money in production facilities is undoubtedly a very strategic one.