Samsung Electronics Co Ltd, the world's largest memory chip maker, said on Monday it would spend 290.9 billion won ($312.6 million) on new chip lines to boost its non-memory production.
Non-memory, or system LSI, chips represent a relatively small portion of Samsung's output, accounting for about 11 percent of the South Korean firm's semiconductor sales in the first quarter. In November, Samsung won its first major deal to provide non-memory chips to US wireless technology company QualComm. The value of the deal has not been disclosed.
"The purpose is to meet growing market demand and boost price competitiveness," Samsung said in a filing to the Korea Exchange, explaining the investment.
Samsung faces competition in the sector from dominant players such as Taiwan Semiconductor Manufacturing Co (TSMC), the world's biggest contract microchip maker, and second-ranked United Microelectronics Corp (UMC).
Samsung, which sells computer memory chips to global PC makers such as Dell, also controls about half of the world's NAND flash memory market.
Demand for flash memory, used in digital cameras and music players, has benefited from the success of Apple Computer Inc's popular iPod and other MP3 players.
But NAND chip prices have slumped since January as extra supplies poured in while demand has cooled off.
Last September, Samsung announced a $33 billion investment plan aimed at more than trebling its chip sales by 2012. The plan, the biggest single investment project since Samsung entered the semiconductor business in 1974, was aimed at widening the gap with its smaller rivals while adding capacity in the relatively weak non-memory area.
Chip makers have huge capital spending requirements as production moves to finer circuitry technology that makes chips smaller and helps cut manufacturing costs.
Samsung shares closed up 1.55 percent at 655,000 won, while the benchmark Korea Composite Stock Price Index (KOSPI) rose 0.78 percent.
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