[Concall] Samsung Electronics "Will Increase R&D Proportion in Capital Expenditure"

[Asia Economy Reporter Han Yeju] Samsung Electronics announced that it will maintain its CAPEX (capital expenditure) scale at the previous year's level this year and increase the proportion of R&D (research and development). This strategy draws a line against market production cut forecasts due to the 'memory cold wave' while continuing preparations for future businesses.

At the Q4 earnings conference call held on the 31st, Samsung Electronics stated, "Recently, purchasing sentiment has weakened due to inflation and interest rate hikes, and companies are prioritizing financial soundness amid concerns about economic downturns, leading to inventory adjustments by client companies. Although the weak market conditions are not favorable for immediate earnings, we believe it is a good opportunity to prepare for the future."

Photo by Hyunmin Kim kimhyun81@

It added, "We will continue infrastructure investments to respond to medium- to long-term demand and secure essential clean rooms. In conclusion, CAPEX will be at a level similar to the previous year."

It also emphasized, "To achieve the best quality and optimize line operations, we are strengthening production line maintenance and equipment relocation, and promoting the transition to advanced nodes. We are expanding the engineering proportion to enhance process technology competitiveness and early stabilization, and the proportion of R&D items within CAPEX is also expected to increase compared to before."

Samsung Electronics plans to continue medium- to long-term investments to prepare for future demand and sustain technological leadership.

Samsung Electronics explained, "The medium- to long-term investment plan includes not only continued differentiation of EUV (extreme ultraviolet) lithography equipment but also the transition to advanced processes to respond to the DDR5 and LPDDR5X markets, which are expected to accelerate in the second half of this year for high-performance and high-capacity memory semiconductors. More long-term plans include infrastructure for R&D capability development, such as the P4 facility at the Pyeongtaek campus, a new semiconductor-dedicated R&D fab, and next-generation process development capacity."

It added, "The foundry will respond quickly and flexibly to demand with the 'Shell First' strategy, and will continue investments focused on expanding production capacity in Taylor, USA, and Pyeongtaek to meet advanced process demand."

Meanwhile, Samsung Electronics executed 53.1 trillion KRW in facility investments last year, of which 47.9 trillion KRW was invested in semiconductors.