SEOUL, Feb. 10 (Korea Bizwire) – Samsung Electronics Co. is expected to reduce its facility investment in the chip business on-year in 2016, data showed Wednesday, while its rivals are estimated to expand their expenditures to catch up to the top player.
According to the data compiled by industry tracker TrendForce, Samsung Electronics is estimated to spend US$11.5 billion on capex, which refers to spending on facilities. The figure marks a 15 percent drop from $13.5 billion posted in 2015.
Samsung is the leading player in the dynamic random access memory and NAND flash market.
In contrast, Intel Corp. is expected to spend $9.5 billion on facility investment in 2016, up 30 percent on-year, the industry tracker added. Intel currently stands as the top player in the overall chip industry.
Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s largest foundry chipmaker, is also estimated to allocate $9.5 billion in capex, up 17 percent from a year earlier.
Industry watchers said Intel and TSMC’s efforts to expand investment are aimed at narrowing the gap with Samsung. Despite the on-year decline, however, Samsung will still remain the leading investor in the chip segment.
“Samsung is going to rapidly branch out to other businesses this year since the outlook on the company’s smartphone business remains negative,” the researcher said, adding the company will “give more weight to its semiconductor businesses.”
Samsung Electronics’ semiconductor business, which recently emerged as the company’s main source of revenue, posted an operating profit of 2.8 trillion won in the fourth quarter of 2015, a tad higher than the 2.7 trillion won posted a year earlier.
The company’s IT and mobile business, which is in charge of smartphones, posted an operating profit of 2.23 trillion won in the fourth quarter, slightly rising from last year’s 1.96 trillion won. But the sector’s operating profit continued to remain well below the 6.43 trillion won posted in the first quarter of 2014.