Samsung Elec to spend US$774mln on memory chip lines

SEOUL, Dec 19 (Reuters) - Samsung Electronics Co Ltd, the world's top memory chip maker, said on Monday it will spend 786.8 billion won (US$774.4 million) to upgrade and expand lines for dynamic random access memory and flash chips.

Samsung, the most valuable technology company outside the United States, is aggressively stepping up investment in an attempt to maintain an edge over rivals, such as Micron Technology and Japan's Toshiba, in the price-volatile and highly competitive market.

The latest spending plan comes nearly a month after Samsung announced a 636.9 billion won investment in new memory lines to boost production of both major computer chips.

It also wants to capitalise on an expected recovery in chip prices.

"It (the spending) is to meet growing demand for flash chips and strengthen cost competitiveness," the South Korean firm said in a filing to the Korea Exchange.

Global microchip equipment sales will likely rise 9.1 percent in 2006, followed by two years of double-digit growth as chip makers invest aggressively in advanced production plants, California-based industry group, Semiconductor Equipment and Materials International said early this month.

Samsung aims to boost its chip sales by more than three-fold to US$61 billion by 2012 from US$17 billion last year.

A top Samsung executive said early in November that prices of its core memory chips were set to stabilise in the second half of 2006 and lower NAND flash chip prices would boost demand.

Flash chips are used in hot-selling mobile phones, digital cameras and portable music players.