Samsung to readjust investment plans due to global supply chain disruption
Tech giant posts record sales of 279 tril. won in 2021
By Baek Byung-yeul
Samsung Electronics will readjust its 2022 investment plans in accordance with the rapidly changing business environment as it tries to deal more effectively with a host of uncertainties such as global supply chain disruptions, the company said Thursday.
"There are various uncertainties, so we will continue to discuss specific investment plans," a Samsung IR executive told investors during a fourth-quarter conference call in response to a question about this year's investment plan for semiconductors.
"As the timing of bringing in equipment is getting longer due to supply chain issues, our investment plan will be established and implemented accordingly," the executive said.
To retain its leadership in the chip industry, Samsung made a record 48.2 trillion won ($40 billion) in facility investments in 2021. This was 9.7 trillion won more than the 38.5 trillion won invested in 2020.
"Facility investment increased compared to 2020, especially in DRAM and NAND memory chips. We expanded the amount early last year to meet increased demand exceeding our outlook, and preemptive investments in expensive next-generation technologies such as EUV have been implemented," the official said.
Samsung is feeling pressure to increase investments in its chip foundry, a chip-making business for chip design companies that don't have manufacturing facilities, to achieve its goal of becoming the top player in the field by 2030.
Market leader TSMC already revealed it will invest between $40 billion and $44 billion this year alone, and Intel is making every effort to build foundry plants in the U.S.
Forecasting its foundry business for this year, which remains at No.2 following TSMC, Samsung said it will "exceed market growth by focusing on expanding supply to global customers."
Regarding the outlook for its memory chip business, the company said it expects there will be risks such as persistent supply issues, but added it expects "server demand to benefit from the adoption of new CPUs and increased IT investments and mobile demand, thanks to a strengthened 5G lineup."
In 2021, the company set its all-time sales record, posting 279.6 trillion won, up 18.1 percent from 2020. Samsung set a record for annual sales as well thanks to robust memory chip demand, despite various difficulties such as the global supply crisis and rising raw material prices due to the prolonged pandemic, the company said.
Its operating profit in 2021 came at 51.6 trillion won, up 43.45 percent from the previous year. In the fourth quarter alone, the company posted sales of 76.56 trillion won and an operating profit of 13.87 trillion won.
In addition to the chip business, Samsung said its fourth-quarter revenue growth was driven by expanded sales of premium smartphones including foldable phones, as well as TVs and home appliances.
Samsung also expects its smartphone business will be on the rise in 2022 and that the wearable device market is likely to see double-digit growth. The company said it "will solidify its leadership in the flagship market by accelerating innovation and differentiated experiences such as the Galaxy S and foldable series, while strengthening the competitiveness of its mass-market 5G lineup and device ecosystem products."
