April 25, 2003– Seoul, Korea — Samsung Electronics Co. Ltd. said today it planned to invest $500 million to upgrade its chip plant in Texas, looking to stay ahead of its rivals in the face of a prolonged slump in global chip prices.
A spokesman for Samsung, a largest memory chip producer, said no time frame for the upgrade on its existing dynamic random access memory (DRAM) chip plant has been fixed, but expected about $100 million to be spent this year, according to Reuters.
“The $500 million investment is to upgrade currently outdated DRAM plant in Austin, Texas,” the spokesman told Reuters. “The upgraded technology will allow us to produce smaller chips.”
The investment will allow Samsung to become more cost effective in DRAM production, a key factor given the drawn-out slump in chip prices. DRAM is the most common type of chip used in computers and electronics product.
Weak PC demand in the wake of the global economic slowdown forced Samsung to cut contract chip prices almost every two weeks during the first quarter to push products out the door, resulting in a 41 percent drop in the chip maker’s profits.
Despite the industry slump, Samsung remains confident about a recovery and plans to invest about 3.29 trillion won ($2.70 billion) on memory chips this year.