Samsung refuses to play chicken with capex

Samsung refuses to play chicken with capex

We knew that Samsung Electronics Co. will reduce investment this year. That's what it has told us.

However, the size of the blank is a surprise. After a record $ 43 trillion ($ 38 billion) last year, it would have been a goal for the South Korean electronics company to keep spending.

However, the announcement of 2018 spending of € 31.8 trillion on Wednesday is 10 percent below analyst expectations.

As a leading manufacturer of DRAM and NAND memory chips, Samsung would have been able to spend the rival with slightly more money to ensure it wins the arms race. Instead, it shows the friendly budget discipline that we rarely see in the industry.

For good reason. According to industry analyst DRAMeXchange, prices for both types of storage are expected to decline this quarter and next year. Samsung confirmed this outlook, but was somewhat more optimistic about DRAM.

So for Samsung, it's time to take a breather and enjoy his leadership role for a while.

To contact the author of this story: Tim Culpan at tculpan1@bloomberg.net

To contact the editor responsible for this story: Matthew Brooker at mbrooker1@bloomberg.net

This column does not necessarily reflect the opinion of the editors or the Bloomberg LP and its owners.

Tim Culpan is a columnist for Bloomberg Opinion on Technology. Previously, he was responsible for Bloomberg News.

© 2018 Bloomberg L.P.

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