Samsung is investing heavily in chip factories at home in South Korea and overseas as it looks to better compete against its rivals in the segment. The company is funding many of these endeavors from its own deep pockets and is also capitalizing on loans, incentives, and grants being offered by various governments to build the facilities.
The company is now reportedly close to securing a $3.6 billion loan that will be utilized for building more chip factories in South Korea and across the globe. The loan is to be sanctioned by a major bank in South Korea.
Samsung isn't afraid of spending money on its chip factories
Samsung is reportedly close to borrowing $3.6 billion from the state-run Korea Development Bank to finance new chip factories. The discussions are currently focused on the exact borrowing size and interest rates, local media reports.
This loans will be provided as part of the $10 billion or so lending scheme that the South Korean government has announced to boost its domestic semiconductor industry. SK Hynix, one of Samsung's biggest competitors in the memory segment, is reportedly borrowing close to $2 billion under this scheme as well.
It's a big deal if Samsung is now turning to debt to finance its chip facilities. It hasn't borrowed funds from the bank in two decades. The company has focused on running its operations without borrowing and instead dipping into its massive cash reserves to fund projects. It has now changed gears now and is open to taking on debt as it seeks to fully capitalize on the AI chipmaking boom.
Samsung is also said to be considering its first corporate bond issue since 2001 in South Korea, and its first bonds since April 2012 overseas. Earlier this year, Samsung also started the process to bring back billions of dollars in cash from its subsidiaries overseas to the headquarters in South Korea, likely to fund chip factories and potential acquisitions.
