Samsung Electronics to Focus on NAND Flash, IoT And 5G
Samsung Electronics has announced a reduction of its investment in DRAM this year, and focus on NAND. During th elast ten days, Samsung held investor relations (IR) events for institutional investors in the U.S. and Korea.
At the IR event held in New York and Boston from the 14th to 16th, investors paid attention to 3D NAND flash, organic light-emitting diode (OLED) and smartphone sales performance. In particular, Samsung Electronics revealed its plan to reduce the investment in DRAM at the event for the first time this year.
The company’s NAND flash business is very profitable and could make up for sluggish sales in the DRAM sector and boost total sales in the company's semiconductor sector. Samsung significantly increased margins in the NAND flash sector this year through steady cost reduction. Its operating margins in the NAND flash sector will grow from 17 percent last year to 25 percent this year.
As global NAND flash manufacturers, such as Intel and SK Hynix, have recently increased the investment in 3D NAND flash production facilities, Samsung is expected to expand the investment in its production facilities to lose its competitors.
Considering the fact that the NAND flash memory capacity of its new smartphones to be released in the second half of the year will be doubled, the construction of its new NAND flash production lines is inevitable.
Samsung has already V-NAND flash production lines running in Xi'an, China, and is considering using the 17th line at the Hwaseong plant as the 3D NAND-only line. Most industry watchers believe that it will produce 3D NAND flash chips at its plant in Pyeongtaek, which will start operation in the middle of next year.
An official from Samsung Electronics said, that the company hasn't decided what to produce at the Pyeongtaek plant yet.
Samsung ranked first with a 31.6 percent share in the NAND flash market as of the end of last year, followed by Toshiba with 18.3 percent, SanDisk with 17.6 percent, Micron with 13.4 percent, SK Hynix with 10.7 percent, Intel with 7.5 percent, Macronix with 0.7 percent and Powerchip with 0.2 percent.
Looking at 5G networking business, IoT
Samsung also aims to become a global top-three player in 5G mobile networks by moving quickly in markets like the United States.
The world's top smartphone maker ranks well behind peers such as Nokia, Huawei and Ericsson in the networks business, after backing CDMA and WiMax wireless technologies that never caught on globally.
The South Korean giant now sees an opportunity to catch up by moving fast and early on 5G, the wireless technology that telecom equipment makers are rushing to develop as the next-generation standard.
"We plan to move quickly and want to be at least among the top three with 5G," Kim Young-ky, Samsung's network business chief, told Reuters in an interview.
"It's important to get in early."
5G wireless networks could offer data speeds tens of times faster than 4G technology.
Major network firms are targeting the United States as it moves rapidly ahead with plans to open spectrum for 5G wireless applications. Some U.S. officials expect to see the first large-scale commercial deployments by 2020.
Crucial to Samsung's plans is a partnership with New Verizon Communications Inc to commercialize the technology. Other firms working with Verizon on 5G include Nokia, Ericsson, Qualcomm and Intel.
Verizon conducts field tests this year and aims to begin deploying 5G trials on home broadband services in 2017 in the United States.
Samsung also said on Tuesday it plans to invest about $1.2 billion in the United States over the next four years on so-called internet of things (IoT) technologies.
In a statement, Samsung said it will make the investments through its Silicon Valley arms such as the Samsung Global Innovation Center in order to develop relevant technologies and strengthen cooperation with startup companies. T
The South Korean firm said separately it and Intel have partnered to form the National IoT Strategy Dialogue, an organization composed of industry and academic members that will discuss IoT-related issues such as privacy protection and advise U.S. policymakers on IoT-related regulation.