Samsung not to cut investment despite significant profit drop

Seoul, Jan 31 (SocialNews.XYZ) Samsung Electronics reaffirmed on Tuesday it has no plan to cut investment for this year despite disappointing earning results in the fourth quarter on a slump in demand.

While unfavourable market conditions are expected to persist, "on the flip side, this is a great opportunity for us to prepare for the future," the company said during an earnings call.

Samsung will "continue to make the infrastructure investments that are necessary to respond to mid-to-long term demand, and to secure the essential clean rooms that we would need to do that. So in conclusion, this year's (capital expenditures) plan is expected to be similar to previous years," it said.

The remark came amid wild speculation that Samsung might join the list of other major memory chip firms, including SK hynix and Micron Technology, to reduce investment and production to deal with falling prices and oversupply, reports Yonhap news agency.

Samsung, the world's largest memory chip and mobile phone maker, also forecast the portion of research and development investment within its total capex will rise this year "in order to enhance our process technology competitiveness and stabilize our process technology early on."

Earlier in the day, Samsung announced disappointing earnings results for the three months ending in December.

Its fourth-quarter operating profit shrank 69 per cent from a year earlier to an eight-year-low of 4.3 trillion won ($3.49 billion), as the global economic slowdown hurt the sales of electronic devices and semiconductors that power them.

It is the tech giant's lowest quarterly operating profit since the third quarter of 2014.

Sales fell 8 percent to 70.46 trillion won for the three months ended Dec. 31, the company said.

"The business environment deteriorated significantly in the fourth quarter due to weak demand amid a global economic slowdown," the company said in a statement.

Source: IANS