“Samsung Electronics plans to spend $14.7 billion on a new chip facility – its biggest investment in a single plant – leaning on its semiconductor business to bolster profits as its smartphone dominance wanes,” Se Young Lee reports for Reuters.
“Samsung, the world’s top memory chip maker, said the plant would be located in Pyeongtaek, roughly 75 kilometers (47 miles) south of Seoul. The company said it would create 150,000 jobs, equal to about a third of the city’s population,” Lee reports. “The bet on chips comes as its smartphone business is being squeezed by Apple Inc in the premium segment and undercut by Chinese rivals like Lenovo Group Ltd in mid-to-low end. April-June operating profit for Samsung’s mobile division fell in annual terms for the second straight quarter, the longest streak since at least 2011.”
“The plant in Pyeongtaek will make either logic or memory chips, Samsung Electronics said, adding that a final decision had not been made yet,” Lee reports. “The chip business is likely to be a lone bright spot in what is otherwise expected to be a poor third quarter for the South Korean giant. Samsung will issue its earnings guidance for the period on Tuesday… Some analysts forecast that the semiconductor division will report stronger operating profit than the handset division in the third quarter for the first time in more than three years. The chip business recorded a 1.9 trillion won (US$1.78 billion) profit in the second quarter, compared with 4.4 trillion won (US$4.1 billion) for the mobile business.”
Read more in the full article here.
MacDailyNews Take: Somebody engrave a plaque for Tim Cook’s office:
“No Apple business for Samsung until justice is finally and fully served.”