Samsung allots $651 m for memory chip lines

SEOUL: South Korea's Samsung Electronics Co. Ltd., the world's top memory chip maker, said it would invest 748.8 billion won ($651 million) on memory chip lines to boost chip production.

Samsung, the most aggressive chip manufacturer in capital investment, is betting on hefty growth in demand for memory chips used in computers and consumer electronics such as mobile phones and digital cameras.

"The investment is to boost cost competitiveness of our memory chip products by introducing next-generation production technologies," Samsung said in a filing to the Korea Stock Exchange.

The investment is part of a 5.77 trillion won budget Samsung earmarked this year for semiconductors and aimed at raising output of dynamic random access memory (DRAM) chips and flash memory chips, a Samsung spokesman said.

Boosting capacity and driving down per-unit manufacturing costs are crucial in determining prices in the DRAM industry.

The World Semiconductor Trade Statistics (WSTS) expects global chip sales to grow 28.4 percent this year. Following this year's robust gain, however, sales are expected to rise 8.5 percent in 2005 and shrink by 0.7 percent in 2006.

Shares in Samsung, Asia's most valuable technology company with a market value of $62 billion, closed down 0.7 percent at 433,500 won to track weak U.S. peers, underperforming a 0.43 percent rise in the broader market.