Samsung Electronics' recently-unveiled capex plans for its memory-chip business in 2010 suggest that the memory chip vendor has foreseen a return to boom times in the PC sector, according to sources at Taiwan-based DRAM chipmakers. The sources believe Samsung's decision to move on to further invest in DRAM capacity is in anticipation of PC market growth over the next three years, rather than to strategically pose a threat to its rivals.
Both Elpida Memory and Micron Technology have moved to cooperate with Taiwan-based DRAM makers, transferring their advanced process technologies in exchange for capacity at the makers' 12-inch fabs.
When Oh-Hyun Kwon, the head of Samsung's chip division, remarked during a speech delivered at a symposium in Taipei on March 16 that DRAM-chip suppliers should avoid blindly seeking capacity expansions, but rather focus on product value and price stability, some Taiwan-based DRAM chipmakers expressed doubts whether the market leader would give up expanding its share of the pie.
Samsung originally planned to invest 5.5 trillion won (US$4.77 billion) in its semiconductors business in 2010 compared to 4.5 trillion won i 2009, saying the rise was due to its further transition to 30nm process technology.
Samsung yesterday (May 17) revealed plans to allocate 11 trillion won – a doubling of its previous estimate – to chip capex in 2010, with nine trillion won for its memory-chip business. Samsung said in a statement that the purpose is to meet growing market demand and to strengthen its competitiveness.
Samsung looks to build a new production line (Line 16) for memory chips, and add capacity to an existing line (Line 15) that only focuses on DRAM production, according to the company.
The analysts saying Samsung aims to squeeze smaller Taiwan-based peers out of the market. By encouraging Elpida and Micron to follow suit to expand their capacities, Taiwan's capacity-oriented players will struggle to survive the next down cycle, according to the paper.
Samsung's revised chip capex also widens its gap with competitors listed in IC Insights' 2010 top-10 semiconductor industry capital spenders. Second-ranked Intel plans a US$4.9 billion budget, followed by Taiwan Semiconductor Manufacturing Company (TSMC) with US$4.8 billion.