SEOUL (Reuters) - Samsung Electronics, the world’s largest maker of memory chips, denied a report saying it may cut its 2009 investment in semiconductors by more than half from last year amid a lingering downturn.
Samsung may invest only 2 trillion-3 trillion won ($1.5 billion-$2.3 billion) in semiconductors this year, down from 6.2 trillion won last year, the Korea Times reported on Monday, citing company sources.
Samsung denied the report.
“At this point, we have not made any decisions on our investment plan, and even if we had a plan it would be contingent on different economic scenarios that will be possible during this year,” Chu-Woo-sik, Samsung’s executive vice president of investor relations, told Reuters.
According to Samsung, the last time investment in semiconductors dropped to the 2 trillion won level was 2002, in the aftermath of a major downturn in the memory chip sector.
The South Korean electronics giant said at a forum in December that capital expenditure would drop to 7 trillion-8 trillion won in 2009 from an expected 10 trillion won in 2008.
“Overcapacity, rising inventories, slumping demand and a sharp fall in chip prices are forcing the company to slash investment,” an unnamed Samsung source was quoted as saying.
Memory chip makers worldwide are being forced to cut output and reduce investment as they struggle under a prolonged slump that many have described as the worst ever in the industry.
Samsung’s home rival Hynix Semiconductor Inc received some $600 million in emergency funding from its shareholders while German chip maker Qimonda also recently resorted to a 325 million euro ($452 million) loan and optional federal aid for survival.
At 0143 GMT, Samsung shares were up 2.98 percent at 484,000 won, compared with the wider market’s 2.08 percent gain.
Reporting by Rhee So-eui and Marie-France Han; Editing by Jacqueline Wong