Samsung to Boost Spending

Samsung Electronics Co., the world’s second-largest chipmaker, said it planned to spend 25 trillion won ($24 billion) over six years on semiconductors to sustain its position in the industry.

The investment may generate 200 trillion won in sales and 10,000 jobs until 2010, the South Korea-based company said in a statement.

Revenue from Samsung’s chip business, which has accumulated 110 trillion won in sales and 29 trillion won in profit over three decades, will probably rise 60% this year to a record, the company said.

Samsung Electronics, the biggest spender in the $226-billion semiconductor industry, has closed the gap, in terms of revenue, with bigger rival Intel Corp. after Chairman Lee Kun-Hee’s investments into new plants paid off. Samsung’s third-quarter profit exceeded that of Intel by more than a fifth.

“This shows how solid they are,” said Jeon Woo Dong, who owns Samsung shares amid the equivalent of $450 million he manages at KB Investment Trust Management Co. in Seoul. “Where else in the world are you going to find a company that invests this much?”

Samsung’s sales from chips are poised to rise 53% to $16 billion this year, and Intel’s are set to rise 11% to $30 billion, according to researcher IC Insights Inc.

Samsung, the biggest maker of memory chips that go into computers and mobile phones, plans to boost its focus on semiconductors used in portable electronic products, aiming to become the biggest maker of five mobile-chip products by 2007, the company said.

Samsung, which has been in the semiconductor business for 30 years, says its capital expenditure exceeds the combined spending of its three smaller chip rivals, and it plans to boost spending on chips by 45% to 5.8 trillion won this year.