SEOUL, South Korea -- Samsung Electronics' Vice Chairman Lee Jae-yong has vowed to keep up robust investments in key businesses as South Korea's leading company weathers slowing demand and the impact of trade clashes between Washington and Beijing.
In a weekend meeting with top Samsung executives, Lee called for "unwavering focus on long-term, fundamental leadership in technology" and reaffirmed plans to invest $112 billion to strengthen the company's presence in the non-memory chip market.
Samsung also last year announced a three-year plan to invest $152 billion to strengthen its memory chip segment and other key sectors and hire 40,000 more people in the process.
"In this rapidly changing environment, we need to keep our unwavering focus on the long-term, fundamental leadership in technology," Lee said in a statement provided by Samsung.
Samsung is the world's biggest maker of memory chips and smartphones, strong both in components and finished products.
The company saw its operating profit during the last quarter drop more than 60% from a year earlier because of falling chip prices and sluggish demand for display panels.
Samsung has forecast that memory chip prices will continue to fall in the second quarter despite expectations for a modest improvement in demand for mobile products.
Analysts say potential U.S. sanctions on Chinese technology giant Huawei could hurt Samsung by further reducing demand for chips used in such products.
In the long run, though, Samsung's smartphone business could benefit from sanctions against its leading rival in that sector.
Advanced Micro Devices Inc. announced Monday that it will license its graphics designs to Samsung for use in Samsung smartphones and tablets, taking its technology into a new market and helping differentiate products from the world's biggest smartphone maker.
The agreement, which is limited to mobile devices where AMD hasn't supplied chips, will be worth hundreds of millions of dollars in licensing revenue to the U.S. chipmaker. Samsung gets access to the designs of one of the top two makers of graphics chips used in PCs, technology that could elevate the performance of its devices. AMD shares jumped in New York on Monday, rising 17 cents to $27.58 a share while Samsung gained 3% in Seoul.
The Korean company may be trying to use AMD to make its products stand out in graphics-intensive applications such as mobile games. The U.S,. company is the second-largest maker of graphics used in cards that allow computers to create more realistic images in games, a market dominated by Nvidia Corp. Smartphones typically use graphics from Qualcomm Inc. or Softbank Group Corp.'s ARM unit, while Apple Inc. designs its own chips.
Information for this article was contributed by The Associated Press and by Ian King of Bloomberg News.
Business on 06/04/2019
Print Headline: Samsung plans investments as hedge against trade wars