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Samsung Announces $165B Investment In Processors Intel Targeted

Days after Apple cut a settlement deal with Qualcomm that saw Intel get out of the 5G modem market, Samsung Electronics has announced a A$165 Billion investment in advanced processors which could see Intel’s dominance of the processor market challenged.

The Korean Company already leads the memory chip market with components for servers to smartphones.

Now they are ramping up investment in semiconductors in the years leading up to 2030 to take the lead in so-called logic chips.

The Company already makes components for arch rivals Apple and Huawei now they are set to target Intel customers including PC makers such as Acer, Dell Hewlett Packard and Lenovo.

“It’s rare for Samsung to detail such a long-term plan,” said Yoo Jong-woo, an analyst at Korea Investment & Securities. “It’s an expression of Samsung’s commitment in a chip business that includes not only Intel but also a variety of chipmakers, such as in mobile processors.”

Samsung unveiled the investment plans the same week that critics exposed weaknesses in their new Samsung Galaxy Fold which was suddenly delayed after devices literally fell apart while being reviewed.

Samsung’s first-ever foldable smartphone was supposed to usher in a new era for mobile and revitalize growth in the sector.

“The investment plan is expected to help the company to reach its goal of becoming the world leader in not only memory semiconductors but also logic chips by 2030,” Samsung said in a statement.

Bloomberg said that Samsung’s semiconductor division has become the main driver of the overall business, yielding three-quarters of its 2018 operating income. The global market for non-memory chips rose to $290 billion in 2017, according to Gartner Inc., compared with $130 billion for memory. It spent 23.7 trillion won on semiconductor equipment last year, expanding capacity to cater to a surge in demand from makers of artificial intelligence and automotive technologies and the so-called Internet of Things.

But slower orders from data centre owners such as Amazon.com Inc. and handset makers including Apple have pushed down prices for both DRAM and NAND memory in recent months. Samsung said in preliminary results that its operating profit for the March quarter dropped 60 percent to about 6.2 trillion won, the worst decline in more than four years.

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