Samsung to boost investments
1/5/2011 2:11 AM EST
SAN JOSE, Calif. - The Samsung Group plans to increase its overall ''investments'' to 43.1 trillion won ($38.3 billion) in 2011, up 18 percent over last year, according to Reuters.
Its chip, handset and LCD unit, Samsung Electronics Co. Ltd., plans to ''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,'' according to the report.
There also could be a sea of change at the company. Lee Kun-hee, chairman of Samsung Electronics, recently promoted his only son to the position of president at the electronics giant.
The son, Lee Jae-yong, 42, was only promoted to executive vice president and chief operating officer 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 percent PC unit growth in 2011 despite some tablet cannibalization 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 35-nm quickly. By the end of Q2 2011, 35 percent of total production should be at 35-nm.''
Its NAND business is less volatile. ''Their strategy is to at least match the industry bit growth rate, which could be 80 percent year-over-year in 2011. They expect the NAND market to remain tight (in 2001). This is similar to Hynix's 80 percent 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 percent 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 percent of total industry capacity.''
Samsung is strong in cell phones. ''Galaxy is selling very well, with 5 million units shipped in Q3 (of 2010) out of the total 8 million smart phones shipped, and should rise 50 percent QoQ to 12 million 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 steadily smart phones, which are now 60 percent of all phone sales,'' he added.