Samsung Electronics will borrow US$15.78 billion from their display sector to maintain an investment level on par with what they displayed last year, even though the industry downturn is predicted to continue.
Samsung will be borrowing from Samsung Display at an interest rate of 4.6 per cent, with the loan set to mature on August 17, 2025.
This comes at a time when the world’s largest smartphone and memory chip maker remains determined to maintain its investment in chips, even though an industry downturn led to their profits plunging in the final quarter of 2022, when Samsung saw their semiconductor business drop by 97 per cent.
Last year, Samsung spent $3.5 billion on infrastructure, with 90 per cent of that channeled into its semiconductor business.
Despite this, in the earnings call for the fourth quarter of 2022 last month, Samsung said, “To secure the best quality and for optimal operation of production lines, we will bolster maintenance and adjust equipment and continuously pursue smooth transition towards cutting-edge nodes for the future.”
The Korean tech giant reportedly holds 100 trillion won as reserve funds, but it decided to take the loan from its subsidiary to avoid complications.
This year, Samsung is also expected to finish construction of a foundry in Texas, with advanced equipment for chip production.
