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Samsung investment boosts system LSI segment

Posted: 10 May 2006 ?? ?Print Version ?Bookmark and Share

Keywords:John Walko? Samsung Electronics? LSI?

Samsung Electronics is investing $314 million to increase its capacity for making system LSIs in a move to boost its non-memories manufacturing production.

Currently, non-memory devices represent only about 11 percent of the Korean chip maker's sales according to its last quarter's figures, with most targeted at devices for mobile phones.

The company said early this week it was making the investment "to meet growing market demand and boost price competitiveness". Samsung is struggling with falling prices of memory chips, especially those used in mobile digital consumer products.

Samsung added that last year it saw the LSI segment as one for future expansion and that it would represent one of the 13 designated future "growth engines". It also forecast that it would invest about $33 billion in additional capacity for making semiconductors and thus treble its chip sales by 2012.

The company won a major deal last year from Qualcomm to supply non-memory chips and, as revealed by EE Times last month, suggested that it would be supplying its media processors to Apple for the next version of the iPod Nano.

Last month Samsung reported semiconductor sales for Q1 2006 of $4.4 billion, down 15 percent over the previous quarter and down 3 percent from a year ago. Operating profits in its chip sector were $1.16 billion for the period, down 31 percent sequentially and down 19 percent a year ago. However, memory chip sales fell 16 percent in the quarter, while system LSI revenues dropped 13 percent in the period.

- John Walko
EE Times

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