Samsung To Keep Chip Investment Despite Record Low Profit In 8 Years

South Korea's Samsung Electronics Co. Ltd. on Tuesday indicated it has no plan to cut investment in chips this year, even as a weak global economy condemns the industry to its worst downturn in over a decade, Joyce Lee and Heekyong Yang reported for Reuters.

Photo Insert: Samsung signaled it would curb short-term production organically through line maintenance, equipment adjustment, and moving to advanced chipmaking processes.

The guidance bucks a broader industry trend to scale back spending and output, fanning concern that the world's biggest memory chipmaker intends to draw on its deep pockets and superior profit margins to gain market share from smaller peers.

"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 Electronics' market share may reach the upper 40% range for DRAM chips and mid-30% range for NAND flash memory chips in the second half of the year, from around 43% and 32%.

Instead of cutting investment in response to slowing demand and falling prices, Samsung signaled it would curb short-term production organically through line maintenance, equipment adjustment, and moving to advanced chipmaking processes.

It also said it would increase the proportion of capital investment that goes into research and development.

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