Despite the impact of the semiconductor downturn, Samsung Electronics and SK Hynix are still actively investing in R&D to strengthen their technology. This is also to maintain their dominance in the storage semiconductor market amid fierce competition from China and the United States.
Industry insiders revealed that Samsung Electronics invested 28 trillion Korean won in R&D last year, a 13% increase from 25 trillion won in 2022.
R&D expenses accounted for 11% of sales, up from 8% in 2022 and 2021.
Despite poor sales and performance last year, with a 14% decrease in sales and an 85% drop in profits, Samsung Electronics continued to strengthen its R&D investments.
Last year, they achieved R&D results like LPCAMM (Low Power Compressed Additional Memory Module) and GDDR7 DRAM.
LPCAMM is a module product based on LPDDR packaging that, compared to current DDR-based laptop memory, boasts up to 50% performance improvement and up to 70% power efficiency improvement.
GDDR7 is a type of graphics DRAM used for rapidly processing large amounts of data in applications like graphics, data centers, and artificial intelligence (AI).
SK Hynix also did not neglect R&D investments last year. Their R&D expenses amounted to 4.2 trillion Korean won.
Although this was a 14.6% decrease from the previous year’s 4.9 trillion won, the R&D expenses as a percentage of sales were 12.8%, higher than 11% in 2022.
Considering SK Hynix’s profitability, it is estimated that a substantial amount of funds was invested in R&D.
While focusing on R&D, the company also considered financial stability.
SK Hynix’s annual sales last year were 32.8 trillion Korean won, a 26.5% decrease from 44.6 trillion won the previous year.
Additionally, the company had an operating loss of 7.73 trillion won last year. Even so, they invested 4 trillion won in R&D.
SK Hynix’s operating profit was 12.4 trillion won in 2021, but last year’s R&D investment exceeded that amount.
Among SK Hynix’s R&D achievements last year, the most notable was the successful development of the fifth-generation high-bandwidth memory (HBM) product for AI, HBM3E.
They were the first in the industry to launch a fifth-generation product and had the fastest mass production of any product in the sector.
Additionally, after successfully developing mobile DRAM LPDDR5T in January last year, they achieved commercialization in November.
Semiconductor companies remain focused on R&D despite deteriorating business conditions to maximize profits in the future market.
Semiconductor technology is rapidly advancing, especially in the memory sector, where a winner-takes-all situation is firmly established.
The company that develops the next-generation product first can sell it at a high price, but when later entrants introduce similar products, prices drop due to increased supply.
Maximizing profits hinges on who first develops advanced products and successfully commercializes them.
Moreover, competition from rivals like Micron Technology in the US and Chinese semiconductor companies is intensifying.
Micron, a newcomer in the HBM sector, followed closely in technology and successfully mass-produced the fifth-generation product HBM3E. Chinese companies have also successfully developed and mass-produced 232-layer NAND, catching up with Korean companies that have reached 238 layers.
An industry insider emphasized, “The development speed of semiconductor technology is very fast, so if you relax for a moment, you might fall behind in competitiveness. R&D is an investment that requires continuous attention, even in tough economic times.”
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