SAMSUNG IS SINKING over $18bn into its chip business as it attempts to solidify its place in the market.
In a statement released on Tuesday, Samsung confirmed it was going to spend 20.4tn Won (around $18bn, £13.9bn) by 2022 to upgrade its chip fab plants in Pyeongtaek (the biggest such plant in the world) and Hwaseong.
The Pyeongtaek plant has already had a 15.6tn Won (£104,152,658,348.54p if we're being precise) sunk into getting it started. In China, the plant in Xian usually associated with high-end storage will get some investment too, but it isn't, at this stage, clear how much.
It's worth remembering that the chip business isn't a purely Samsung to Samsung thing and in fact produces a lot of the inner workings of the Apple iPhone, which means it is already most likely in overdrive ahead of the launch of the iPhone 8.
Samsung's profits have remained high because its chip business has offset the borkage of the Galaxy Note 7 and lacklustre sales in other departments.
"Our clients are having difficulty securing enough semiconductor chips due to growing global demand for high-tech gadgets," said Samsung in a statement
"We plan to actively respond to those demands by making aggressive investments on our production lines at home and abroad," it added.
Sammy already makes around 40 percent of the world's chips and with rivals such as Toshiba already in flux as it prepares for a takeover by a Japanese government-led consortium, this is a great time to pounce on the opportunity to fill that void.
The scarcity of chips is driving up the cost, which is then being passed on to the consumer. Samsung's investment could mean good news for its rivals as chip prices come down, meaning smaller profit margins but more sales in a market where there is always demand for more.
Research suggests that prices could jump as much as 53 per cent for desktop chips this year, but Samsung believes that as well as bringing that figure down to a more sensible level, it will also create up to 440,000 jobs in the sector.
Samsung is widely expected to p*ss on Intel's chips this quarter, overtaking it as world number one. µ
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