Samsung Still Unfazed By Threat Of China's Chip Industry

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Samsung Electronics remains unfazed by the potential threat of China's chip industry catching up with its solutions and providing the company with added competition, Device Solutions Division chief Kim Ki-nam said Friday during a shareholder meeting. While China's largest players have recently been committing significant resources into ramping up their chip advancements and manufacturing operations, the barriers to entry into the segment are "relatively higher" compared to many other fields in which they are successfully competing with Samsung, Mr. Kim believes. "Short-term investments" alone won't allow China's companies to take on Samsung in chipmaking, no matter how large they are, the industry veteran insists.

Samsung's executive was quick to point out that his comments aren't meant to imply the tech giant is content with resting on its laurels going forward, having added that the company is still entirely committed to leading the segment in terms of manufacturing scale and innovation. Instead, he only wanted to illustrate how China's rising ambitions in the chip industry don't warrant a strategy revision on Samsung's part, at least not for the time being. The commentary was given in response to a question from one investor who raised some concerns about Samsung's long-term prospects in the industry given the recent rise in competition.

The Seoul-based original equipment manufacturer became the world's largest chipmaker in 2017, thus breaking decades of Intel's dominance in the sector. The firm's semiconductor division has largely been responsible for its record-breaking performance in recent quarters, though numerous analysts already expressed skepticism in regards to the firm's ability to maintain such aggressive growth in the medium term. In regards to mobile chips specifically, Samsung isn't competing with the likes of Qualcomm and MediaTek on any significant scale due to licensing issues, with its Exynos-branded silicon still being made almost exclusively for its first-party products, even though some models continue pushing the boundaries in their respective price brackets.

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