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Samsung to Invest $10 Billion into Semiconductor Business This Year

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Samsung has planned to invest as much as $10 billion during 2015 into its semiconductor business. This comes amid the increasing demand that continues to fuel growth in the company’s best performing division.

The senior vice president of Samsung’s semiconductor division, Jeeho Baek stated that last year the company had invested around $9.36 billion into the semiconductor division.

He also stated that the company is now planning to maintain similar volume this year as well. He explained that the company has set DRAM and NAND production ratio to 7 to 3 and will manage this according to future demand.

Apart from this the South Korean manufacturer has also increased its production capacity for memory chips. The company has introduced an additional line that will produce DRAMs at Hwaseong which is the company’s main hub for memory chip production in South Korea. Moreover the tech giant is also planning to start construction of a new plant that will be located in Pyeongtaek, South Korea. The company is thinking of investing around 15.6 trillion won in the factory by 2017.

Furthermore the world’s second largest semiconductor vendor has also planned to increase offerings that use 3D V-NAND. Up till now only Samsung and the Japanese Toshiba have commercialized 3D V-NAND. 3D V-NAND basically stacks cells vertically within a chip in order to increase the storage capacity in the same space.

Moreover Baek also stated that Samsung will now also offer 3D V-NAND solid state drives (SSDS) which are aimed at consumers by the second half of the year.

Now according to market research firm HIS, Samsung Electronics held 34 percent of the market share for SSDs last year with revenues of $3.996 billion. As many of you would remember last year Samsung had launched numerous 3D V-NAND SSDs for the enterprise.

Then there are some insiders that say that Samsung has won supply deals with Google and Amazon to supply SSDs for the latter’s data centers. Apart from this the IT service arm of Samsung Group, Samsung SDS will also be using Samsung made NANDs when building servers for clients.

The rivals in this market such as Toshiba and Micron have also started to ramp up efforts in order to commercialize 3D V-NANDs but they are still far from Samsung’s achievements and so Samsung will keep on reaping high margins in this market. Plus for mobile clients the company still believes that 2D NANDs are the best.

Then there is the contract chip business of Samsung which is called System LSI and it is likely that it will enjoy a surge in profits as well. Samsung is said to produce chips for Apple, Qualcomm and Nvidia both in 14 nanometer and 20 nanometer processes.

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