Samsung expected to reveal $18 billion chip capex

LONDON -- Samsung Electronics Co. Ltd. is expected to announce a dramatically increased annual capital expenditure plan for chip making on Monday (May 15), according to a Reuters report. Some local media are saying it could be as much as 20 trillion won (about $17.7 billion), the report said.

Samsung is expected to make an announcement at a ground-breaking ceremony for a wafer fab due to take place on Monday (May 15).  Such a large some would represent a more than doubling of Samsung's existing, industry-leading capex plan and it is hard to see how the chip equipment industry could ramp up quickly enough to supply additional equipment.

However, as the world's second largest chip company and largest capital spender the chip equipment industry may be tempted to divert equipment previously bound for other fabs towards those of Samsung.

After several years of below average capital expenditure on chip making demand for chips is now exceeding the industry's ability to supply. As a result all the leading semiconductor manufacturers are now seeking to increase their spending quickly to try and expand production and get state-of-the-art fabs built to exploit the demand. This is producing a capex arms-race amongst a handful of leading foundries and IDMs.

Related links and articles:

Reuters report

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Foundries embroiled in capex 'arms race'