Mar 29, 2001 South Korea's major chipmaker Samsung Electronics (05930) has decided to cut its 2001 capital expenditure by one trillion won ($769.2 million) because of a slowdown in the global chip market, a local newspaper reported.
In its early Friday edition, the Maeil Business Newspaper quoted an unnamed Samsung official as saying it would cut its planned 7.7 trillion won in investment for this year by one trillion won.
"Due to the gloomy semiconductor business outlook and the unfavourable economic situations in the United States and Japan, we decided to delay about one trillion won in investment to next year," the official was quoted as saying.
A Samsung Electronics spokesman denied the report; "we have been saying that we could adjust our capital expenditures flexibly in accordance with market conditions," spokesman James Chung told Reuters. "But so far, there's no official change in our planned investment for this year."
The company had said it earmarked 7.7 trillion in total capital expenditure, including 7.3 trillion won in facilities investment, for 2001.
Of the 7.3 trillion won facilities investment, the company said some 6.6 trillion won would be spent on semiconductor business, including memory and non-memory chips and TFT-LCDs (thin film transistor-liquid crystal displays).
"If we really decide to cut down on the expenditure, the first area that has to go would be the investment for semiconductors," Chung said.
Samsung also produces electronic home appliances like television sets, refrigerators and cameras and telecommunications equipment, including mobile phones.
Shares of Samsung finished down 1.4 percent at 204,500 won on Thursday.
Samsung Electronics Co., Ltd., with 1999 sales revenue of US$22.8 billion is a world leader in the electronics industry. Headquartered in Korea, the company has operations in about 50 countries with 54,000 employees worldwide. The company consists of three main business units: Digital Media, Semiconductors and Information & Communications Businesses.
