South Korea’s Samsung Electronics Co. spent $44 billion in 2017 on capital expenditure than any other publicly traded company, according to S&P Global Market Intelligence report.
The report shows how technology and telecommunications firms are driving an uptick in manufacturing investment.
The South Korean tech giant nearly doubled its investment in new or existing facilities making semiconductors, displays and other products putting Samsung atop the global ranking for the first time.
Samsung’s estimated operating profits of $14.1 billion for its fourth quarter, making it the third quarter in a row that Samsung surpassed its earnings record despite its executives being embroiled in corruption scandals.
According to Goldman Sachs, Samsung’s big bets underscore a rebound in companies’ willingness to invest in boosting production in the future, as
2017 brought an end to four straight years of global declines. Technology companies are projected to increase investment the most.
The proliferation of Internet-connected gadgets and the need for skilled manufacture of dozens of micro-sized components are the reasons driving their spending.
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Also, the need for massive data-server farms for immense computing power and memory chips are increasing due to rise in artificial intelligence (AI).
A Samsung spokesman declined to comment beyond what the company has publicly disclosed. Avril Wu, research director at DRAMeXchange, a company that tracks semiconductor sales and prices said that “Samsung has no choice but to invest like this, they still have to secure more market share.”
This puts Samsung, the world’s largest smartphone maker, in a position to cash in. The phone giant also supplies the likes of Apple Inc., Dell Technologies Inc., HP Inc. and Sony Corp., with smartphones, laptops, and televisions Samsung-made parts.
Samsung’s $44 billion in capital spending will largely go toward boosting production of flexible smartphone displays and memory chips that store photos on smartphones and give devices their multi-tasking speed.
