Samsung sees dip in chip business, plans more capacity
Despite the current chip shortages, Samsung Electronics saw a dip in its semiconductor business in the first quarter of 2021. However it is planning to expand its memory fab for its logic foundry business later this year.
The company saw an operating profit of KRW 9.38 trillion (US$840m) on sales of KRW 65.39 trillion (US$58bn). This was up 6% for sales and a record for the company, driven mainly by 5G smartphones and consumer electronics.
The semiconductor business saw an earnings decline quarter-on-quarter despite solid memory shipments, mainly due to the production disruption at the Austin fab, and a downward trend in NAND prices as well as the initial costs of new line for the latest process node.
It is starting the development of its second generation 3nm process and completing the development of the 14nm and 8nm RF processes for more integrated 5G chip designs.
The company sees a recovery in the chip market in Q2 with higher demand for server memory for data centres. The Memory Business is expected to see solid demand for server and mobile products and the company will accelerate migration to 15nm DRAM and 128-layer 6th-generation V-NAND as well as expand application of extreme ultraviolet (EUV) lithography processes.
The System LSI Business, which makes mobile SoCs and image sensors, will work with foundries in Korea and abroad, including the plant in Austin, Texas, that is now back in operation. The Foundry Business will expand supply with mass production at the Pyeongtaek Line 2. This is already ramping up for 10nm 16GB LPDDR5 mobile DRAM using the EUV process but the fab will also be used for logic chips in the second half of 2021.
The company plans to spend KRW 8.5tn (US$7.6bn), the vast majority of its KRW 9.7tn capital expenditure budget, on semiconductors this year.
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