Thursday, April 29, 2004
Samsung aims to make 25% of its output in China
Reuters Suzhou, April 29
Samsung Electronics Co Ltd aims to make almost a quarter of its output in China this year, tapping the country's lower costs and booming market, a company official said.
The South Korean firm expects to produce about $9 billion in goods this year at its Chinese operations, which include about a dozen plants making everything from memory chips to home appliances and liquid crystal displays (LCDs), said Li Chengchun, a senior manager in the country.
The company is targeting 2004 sales of 46.34 trillion won ($40.22 billion) worldwide.
"Our goal is to have a quarter of our output from China, but that could be difficult to reach," Li told Reuters on Wednesday.
Samsung has doubled to $300 million its investment in its memory chip plant in the eastern city of Suzhou to boost output, Li said.
The extra spending will allow Samsung to double its semiconductor production in China this year, with another increase of 50 per cent in 2005 when all the new capacity comes on stream.
The semiconductor business is expected to account for more than a fifth of its China output this year, Li said in an interview at Samsung's China headquarters in Suzhou, a two-hour drive from Shanghai.
Samsung has invested $2 billion to $3 billion in China to date, about 40 per cent of that in a series of factories in Suzhou.
Li said Samsung has also built in ample room for expansion in China in another of the company's high-growth areas, LCD monitors used for computers and televisions.
He said the company has invested about $300 million in its Suzhou LCD plant to date. Samsung had no immediate plans to raise that amount and anyway was using only about 100,000 square metres (1.1 million sq ft) of the 550,000 sq m (5.9 million sq ft) factory.
"There is plenty of space to grow," Li said.
© Hindustan Times Ltd. 2004.