Samsung Silicon Capex For H2 To Shrink Year-On-Year

When it comes to investments in silicon development, such as NAND flash and semiconductors, the second half of the year is usually when things kick up for just about everybody. If a company can afford it, raising their capital expenditure year on year to fund more research and development normally helps with bringing out new technologies faster in this highly competitive time of year. Competition in the second half of the year is normally fast and furious, with companies working hard to make the innovations that will allow them to crank out new products in smaller, faster, and less expensive form factors throughout the first half of next year. That makes it seem just a little strange that Samsung, one of the top dogs in the silicon field, is actually decreasing spending year on year for the second half of 2016, but they're actually still on top of the game.

When it comes to new technologies in the world of silicon and driving down the girth of dies by a couple of nanometers, Samsung is almost always the first to the table. 2016 and 2017 don't look to be any different, but there is one key difference from past years that's worthy of note. Traditionally, everybody in the space increases their second half capex year on year to make bigger and better innovations. Samsung, however, is dropping their second half spending by a whopping 15% year on year.

This move doesn't exactly herald a tapping of the brakes for Samsung, of course; they are still top dog in both total capex, and first half to second half uptick for 2016. Their two strongest competitors, TSMC and Intel, are jumping up by significant figures, 24% and 30% year on year respectively, and still can't match Samsung's spending. 2015 was a fat year for the Korean giant, and the first half of 2016 has been quite kind to them as well, with the wild success of the Galaxy S7 and S7 Edge bringing in far more cash than they predicted it would. This means that their previous year capex was fairly high, even for them, and a shrink this year is only natural. In the semiconductor space, Samsung is already killing it, so why pump more money into the space when innovations take time? There are only so many talented silicon engineers out there, and Samsung can't really just pull all of them away from their current jobs to work for them, and engineers don't simply work faster if there's more money in front of them. Thus, this move by Samsung may seem strange on the surface, but looking closer, it makes perfect sense. There is still every reason to believe that Samsung will lay the competition low in the silicon space through the rest of this year and into 2017, like they do every year.

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Daniel Fuller

Senior Staff Writer
Daniel has been writing for Android Headlines since 2015, and is one of the site's Senior Staff Writers. He's been living the Android life since 2010, and has been interested in technology of all sorts since childhood. His personal, educational and professional backgrounds in computer science, gaming, literature, and music leave him uniquely equipped to handle a wide range of news topics for the site. These include the likes of machine learning, voice assistants, AI technology development, and hot gaming news in the Android world. Contact him at [email protected]
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