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Chip equipment makers buoyed by prospects of Samsung investing in NAND memory

All Headlines 10:56 August 30, 2016

SEOUL, Aug. 30 (Yonhap) -- South Korean chip equipment manufacturers are likely to see their earnings rise in the second half of the year amid market speculation that Samsung Electronics Co. may plan to heavily invest in production lines for 3-D NAND flash memory chips.

Samsung, the world's largest maker of memory chips, has not revealed how much it will spend on boosting the production capacity of 3-D NAND chips, which are widely used for smartphones and other smart devices.

But market watchers have speculated that Samsung has begun a multibillion dollar investment to increase the production capacity of chips.

Analysts expected local chip equipment makers -- Eugene Technology Co., TES Co. and Wonik IPS -- are likely to benefit from the apparent investment plan by Samsung.

Samsung is expected to account for more than half of Eugene Technology's annual sales this year.

Last year, SK hynix Inc. accounted for 58 percent of Eugene Technology's annual sales, but Eugene Technology appears to be expanding its shipments to Samsung this year.

Eugene Technology is believed to have expanded its shipments of low pressure chemical vapor deposition (LP-CVD) equipment to Samsung. The equipment can be used in producing 3-D NAND flash memory chips.

In the first half of the year, Eugene Technology reported an operating profit of 26.5 billion won (US$23.7 million), compared with 10.1 billion won for the same period last year.

Another chip equipment maker, TES, also reported handsome results in the first half of 2016, aided by a rise in the equipment supply to Samsung.

TES posted an operating profit of 16.4 billion won for the January-June period, more than double from the same period last year.

Wonik IPS, which has also supplied chemical vapor deposition (CVD) equipment to Samsung, reported an operating profit of 3.7 billion won for the second quarter of the year.

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