Sat, Sep 26, 2015 - Page 14 News List

Samsung targets logic for growth

Bloomberg

Samsung Electronics Co, the world’s second-largest chipmaker, wants to get bigger and is targeting an expansion in logic chips as part of its effort to add to its leading position in memory.

The company intends to sell more chips to other companies and will not put the needs of Samsung divisions ahead of its potential external customers, said Kim Gi-nam, head of the company’s logic chip business.

The South Korea-based chipmaker is also the world’s largest maker of smartphones, a leading supplier of TVs and among the top suppliers of LCDs and other components.

“We believe we have plenty of room to grow,” Kim said. “If you have a fab [plant] to operate, it doesn’t matter whether your customer is internal or on the outside. Whoever buys our capacity is the primary customer.”

Samsung on Thursday opened a new chip research and design center in Santa Clara, California. The 92,903m2 building, close to the headquarters of companies such as Cisco Systems Inc and Intel Corp, is aimed at keeping Samsung competitive with Silicon Valley companies in its ability to recruit engineering talent, Kim said.

The company has suffered declining sales over the past year and a half as its Galaxy line of mobile phones has lost market share to Apple Inc’s iPhone and faces lower-priced competition from Chinese newcomers. Its chip business has countered that trend, increasing sales and profitability in part by supplanting Qualcomm Inc products in its own mobiles and by performing contract manufacturing for Apple.

Samsung is the world’s biggest maker of memory chips, a market dominance that makes it the second-largest chip producer behind Intel. Operating profit in the most recent quarter at Samsung’s semiconductor business — which makes memory chips, applications processors and camera sensors — was 3.4 trillion won (US$2.85 billion), compared with 1.86 trillion won a year earlier.

Samsung shares yesterday fell 1.2 percent to close at 1.1 million won in Seoul trading. They have dropped 16 percent this year, compared with the benchmark KOSPI index’s 1.4 percent gain.

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