Samsung to top chip capital expenditures in 2021 amid competition with TSMC: report

SEOUL, March 17 (Yonhap) -- Samsung Electronics Co. is expected to top the semiconductor capital spending this year, a report showed Wednesday, as it tries to catch up with the leading foundry firm Taiwan Semiconductor Manufacturing Co. (TSMC).

The South Korean tech giant, the world's largest memory chip producer, has not provided guidance for its 2021 chip investment, but the company's outlays are expected to be flat from 2020, which was estimated at US$28.1 billion, according to the McClean Report published by market researcher IC Insights.

It projected TSMC to rank second with estimated spending at around $27.5 billion this year. The Taiwanese chipmaker in January announced that it plans to jack up its capital spending to $25-$28 billion this year.

IC Insights data showed Samsung has been the world's largest semiconductor capital expenditure spender since 2010, with big outlays concentrated in recent years to secure advanced process technologies for logic chips.

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"The sheer magnitude of Samsung's spending over the 2017-2020 time period is unprecedented in the history of the semiconductor industry," it said. "At $93.2 billion, this amount was more than double the $44.7 billion spent by all the indigenous China semiconductor suppliers combined over this same time frame."

In 2019, Samsung unveiled a plan to become the world's No. 1 logic chipmaker by 2030 by investing 133 trillion won (US$117 billion) to bolster its competitiveness in the system chip and foundry businesses.

IC Insights predicted the combined expenditures of Samsung and TSMC will reach at least $55.5 billion this year and will represent 43 percent of the entire semiconductor industry capital spending, the highest percentage of the chip industry outlays held by the top two spenders.

"It now appears that both Samsung and TSMC realize the golden opportunity that is currently before them," IC Insights said. "With no other companies presently able to match these huge spending sums, Samsung and TSMC will likely put even more distance between themselves and their competition this year with regard to advanced integrated circuit (IC) manufacturing technology."

It doubted that other chipmakers or governments like the United States, China and the European Union will invest heavily in their IC businesses and catch up to Samsung and TSMC.

"Considering how far behind they are, IC Insights believes that governments would need to spend at least $30 billion per year for a minimum of five years to have any reasonable chance of success." it said.

kdon@yna.co.kr
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