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Samsung Group investments to rise to Rs.1.70 lakh crore

Posted: 10 Jan 2011     Print Version  Bookmark and Share

Keywords:investment growth  LCD  DRAM 

The Samsung Group's overall "investments" in 2011 will amount to Rs.1.70 lakh crore (43.1 trillion won), up 18 per cent over last year, a Reuters report revealed.

The same report disclosed that Samsung Electronics Co. Ltd., the electronic giant's chip, handset and LCD unit, will ''spend 10.3 trillion won in the semiconductor sector, 5.4 trillion won in the LCD business and another 5.4 trillion won in the OLED business.''

There also could be a sea of change at the company. Lee Kun-he, chairman of Samsung Electronics, recently promoted his only son to the position of company president.

The son, Lee Jae-young, 42, was only promoted to executive VP and CEO last December. He started his career at Samsung in 1991.

South Korea's Samsung beat analysts' estimates for the third quarter, but the company issued a warning about a pending DRAM glut in the marketplace. ''Samsung forecast 13 per cent PC unit growth in 2011 despite some tablet cannibalisation of low-end notebook PCs,'' said David Rubenstein, an analyst with MF Global, in a recent report.

''We estimate that DRAM capacity should be close to 400,000 per month in Q4, up from 385,000 in Q3,'' he said. ''The firm is ramping 35nm quickly. By the end of Q2 2011, 35 per cent of total production should be at 35nm.''

Its NAND business is less volatile. ''Their strategy is to at least match the industry bit growth rate, which could be 80 per cent Yoyo in 2011. They expect the NAND market to remain tight (in 2011). This is similar to Hynix's 80 per cent bit growth guidance for 2011 for both supply and demand,'' he said.

In LCDs, ''Samsung's plan is for 7.5G panels in China, which would add at least 10 per cent capacity to current capacity. Production would start in 2012 or 2013, and we believe that equipment would be ordered sometime in 2011,'' he said. ''Samsung has about 27 per cent of total industry capacity.''

Samsung is strong in cell phones. ''Galaxy is selling very well, with 5 million [50 lakh] units shipped in Q3 (of 2010) out of the total 8 million [80 lakh] smart phones shipped, and should rise 50 per cent Qi to 12 million [1.20 crore] for smart phones in Q4. Q4 should be the same level as Q3 for Galaxy due to the shortage in OLED screens,'' he said.

''The firm's strategy now is to continue to release smart phones, which are now 60 per cent of all phone sales,'' he added.

Mark Lapedus
EE Times

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