In this Oct. 26 photo, Samsung Electronics’ Galaxy S7 smartphone is displayed at the Korea Electronics Show. PHOTO: ASSOCIATED PRESS

 

SEOUL— Samsung Electronics Co. said that it would invest more than $1 billion in its Austin, Texas, semiconductor factory, as the South Korean technology giant seeks to bounce back from its recent smartphone recall by redoubling its efforts in smartphone components.

Samsung, which reported its worst quarter of operating profits in two years in the three months ended Sept. 30, said last week that it would spend more than 27 trillion Korean won ($23.65 billion) on capital expenditures this year, a record high, to beef up its capabilities in semiconductors and display panels. 

The emphasis on components sales comes as the company has been reeling from a spate of reported fires that forced it to discontinue its Galaxy Note 7 last month. 

In Austin, Samsung said that it would spend the money over the next eight months to boost production of processor chips for smartphones and other devices. The company says it has invested more than $16 billion in its Austin facility, which it opened in 1997.

While Samsung’s mobile fortunes have taken a bruising, the company’s components division remains a bright spot. The company is widely considered to be a leader in producing 3-D NAND flash memory chips which are widely used in computer and mobile phone storage and organic light-emitting diode, or OLED, panels, for smartphones and televisions. It is also the world’s largest producer of dynamic random access memory, or DRAM chips by volume.

In the most recent quarter, Samsung’s components division accounted for 84% of the company’s overall operating profit, the highest proportion since Samsung launched its first Galaxy S-series smartphone in 2010.

Source:WSJ