Korean chipmakers vow W51.9tr investment amid record sales forecasts

By Song Su-hyun

SK hynix CEO determined to acquire Toshiba chip unit

  • Published : Sept 18, 2017 - 15:49
  • Updated : Sept 18, 2017 - 17:02
South Korean chipmakers and display manufacturers vowed to invest a combined 51.9 trillion won ($45.8 billion) by 2024 to help stimulate the economy and create jobs, in correspondence to their anticipated record sales forecasts this year at a meeting with the country’s Industry Minister on Monday.

Eleven chiefs of semiconductor and display businesses -- including Kwon Oh-hyun, vice chairman and CEO of the device solutions business of Samsung Electronics, Park Sung-woo, chairman and CEO of SK hynix -- attended the meeting hosted by Paik Un-gyu, minister of trade, industry and energy, to discuss current issues and difficulties faced by the industry. Investment and job creation were major topics of the discussion, according to the ministry.

Samsung Electronics, the world’s No. 1 chip provider, confirmed its plan to invest a total of 21.4 trillion won ($19 billion) in its memory chip fabrication lines in Hwaseong and Pyeongtaek in Gyeonggi Province, and in organic light-emitting diode display line in Asan, South Chungcheong Province, by 2021. The figure includes one of Samsung’s biggest investment plans -- 15 trillion won for the new Pyeongteak 3-Dimensional NAND flash plant -- which kicked off operations in July. 
Kwon Oh-hyun (center), vice chairman and CEO of the device solutions business of Samsung Electronics, and participants listen to a statement by Paik Un-gyu, minister of trade, industry and energy, during their meeting in Yeouido, Seoul, Monday. (Yonhap)

SK hynix said the company will inject 15.5 trillion won into building a new line for NAND flash memory chips by 2024.

LG Display pledged to make a 15 trillion won investment in Paju, Gyeonggi Province and Gumi, North Gyeongsang Province by 2020.

“Semiconductor and display are crucial sectors of the Korean economy,” said Minister Paik. “I express gratitude towards pre-emptive investment plans by the companies and ask for more to create quality jobs.”

According to the financial industry, benefitting from the global chip boom along with the wave of the ‘fourth industrial revolution,’ the combined chip sales of Samsung and SK hynix are estimated to surpass 100 trillion won for the first time this year.

Samsung is forecast to post up to 78 trillion won in sales by the end of the year, while SK hynix is projected to reach 29 trillion at the highest, showed data by stock brokerage firms.

The total sales of the two Korean chipmakers account for 6.1 percent of the country’s gross domestic product at 1,637 trillion won as of last year.

After the meeting, SK hynix CEO Park showed determination towards the ongoing talks to buy Toshiba‘s chip business, saying “we will make our best efforts.“ Park declined to comment further due to the non-disclosure agreement.

Toshiba is said to aim to finalize the deal to sell its NAND Flash unit to a consortium led by US private equity group Bain Capital by Wednesday at a board meeting, according to Japanese news reports.

The consortium includes SK hynix and iPhone giant Apple.

The group was chosen a preferred bidder by Toshiba in June, but signing of the final contract has been postponed due to opposition from Western Digital, a long-time partner of the Japanese conglomerate and also leader of a rival consortium.

However, Toshiba started leaning back towards the Bain group last week after the group proposed a bigger buying price, which is estimated at 2.4 trillion yen ($21.5 billion), than an initial price. The group offered an additional 400 billion won for the chipmaker’s R&D investment.

By Song Su-hyun (