Among major makers of memory chips, Samsung is only company to clear a profit. This year, it expects to sell US$7 billion worth of memory chips.
Niche products like graphics chips for game consoles and flash memory chips for cell phones and hand-held computers have helped Samsung make money in an industry plagued by overcapacity and declining demand. And last year, Samsung moved to a newer, more expensive chip, the DDR, or double data-rate, chip. But with the market flooded with chips, prices for the standard D-ram chips are down by almost 50 percent compared to the same time a year ago.
Although Samsung is dependent on the memory chip market, chips accounted for only 23 percent of Samsung's sales during the last quarter.
But in a highly competitive sector, three of Samsung's main products -- chips, cell phones and liquid-crystal display screens -- saw sales increase last year, even though prices went down. And it has been affected by consumer credit problems.
"They have to inject money, from US$110 million to US$470 million, to bail out their credit-card company," said Jon Chong-Hwa, director of equity research at Daewoo Securities, referring to Samsung Card Co, which is 56 percent owned by Samsung Electronics.
In the fast-moving flat-screen field, LG Philips LCD, a South Korean-Dutch joint venture, nosed ahead of Samsung late last year to become the world's largest producer for a quarter. In a sharp counterattack, Samsung announced a month ago that it would invest US$1 billion in a new flat-screen production plant, adding 60 percent to its production capacity. Of the US$650 million in new investments announced last week, almost all the money is to go to making thin-film-transistor liquid-crystal displays, the main component in LCD monitors, laptop computer screens and some flat-panel televisions.
In mobile phones, Samsung has come from virtually nowhere to become the fastest growing of the world's big three manufacturers, surpassing Nokia of Finland and Motorola of the US. In the last two years, Samsung doubled its share of the world market, selling US$10 billion worth of cell phones last year. This year, it plans to increase its market share to 12 percent of the 435 million cell phones expected to be sold around the world this year.
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