Samsung Electronics Co Ltd is intending an investment of investing $116 billion in non-memory chips through 2030, developing chips for AI-enabled devices and self-driving cars, and are in plans of reduce its dependency on the volatile memory chip.
The moves highlights South Korean electronics maker’s objective of challenging bigger rivals like San Diego-based Qualcomm Inc for mobile processing chips and Taiwan’s TSMC for manufacturing of contract chips, as the memory chip market has now been slightly slimming down after enjoying a record-breaking growth in previous years.
With the emergence of new technologies like artificial intelligence, connected cars and fifth-generation (5G) mobile networks; players in the global semiconductor market are now in pursuit of manufacturing powerful chips for those new technologies.
In March, that race led the Nvidia Corp beating Intel Corp by signing a $6.8 billion deal to acquire Israeli chip designer Mellanox Technologies Ltd in a bid that will help the company to boost its AI and data center businesses.
In late last month, Samsung has said that its non-memory chip investment of 133 trillion won ($116 billion) will include 73 trillion won of spending on domestic R&D and 60 trillion won to be spent on production infrastructure.
The company is likely to be achieving goal of becoming world leader in memory semiconductors as well as logic chips by 2030 through this investment plan, Samsung said in its statement.
Although company did not further specify the details of its investments in the semiconductor segment, but analysts are expecting it to be around half of the investment, based on their observation that more than half of Samsung’s capital expenditure usually goes toward the memory chips.
In 2018, Samsung’s semiconductor division generated 96 percent of operation’s profit, while utilizing four-fifth of 29.4 trillion won of capital expenditure.
Samsung is currently holding a share of 19 percent in contract chip manufacturing market, according to industry tracker TrendForce.
