'R&D Cannot Be Reduced Even in a Recession'... Semiconductor Industry Continues Preparing for the Future

The semiconductor industry is struggling with increasing inventory due to weak demand, but it is increasing investment in research and development (R&D) to prepare for the future. Even if facility investments are reduced for the time being, they are actively investing in R&D, which will be responsible for future technologies.

On the 16th, Samsung Electronics announced in its quarterly report that its R&D investment in the first quarter amounted to 6.579 trillion won. This is the largest quarterly amount ever, representing an 11.1% increase compared to the first quarter of last year. Despite the semiconductor downturn, Samsung Electronics invested more than 90% of its total first-quarter facility investment of 10.7388 trillion won, specifically 9.7877 trillion won, in semiconductors.

SK Hynix allocated 1.0896 trillion won to R&D investment in the first quarter. Compared to 1.2043 trillion won in the first quarter of last year, when performance was strong, this is only a slight decrease. SK Hynix reduced its facility investment in the first quarter of this year to 1.748 trillion won, a 62% decrease compared to the same period last year, but it did not significantly cut back on R&D. Since the memory semiconductor market cycle repeats, the company’s intention is reflected in continuing investment in future technologies through sustained R&D, even if the current market conditions are unfavorable.

The market conditions, which hit bottom in the first quarter of this year, are also reflected in the increased inventory assets of semiconductor companies.

As of the end of the first quarter, Samsung Electronics’ inventory assets amounted to 54.4195 trillion won, a 4.3% increase compared to the end of last year. Compared to one year ago, it increased by 14.3%. In particular, the semiconductor division’s inventory assets grew nearly 10%, from 29.0576 trillion won at the end of last year to 31.9481 trillion won at the end of the first quarter this year. SK Hynix’s inventory assets as of the end of the first quarter also increased by 9.7% compared to the end of last year, reaching 17.1822 trillion won. Compared to one year ago, it increased by as much as 65%.