Samsung Electronics Co. will borrow close to $16 billion from its display-making subsidiary to help it sustain a blistering pace of investment.
(Bloomberg) — Samsung Electronics Co. will borrow close to $16 billion from its display-making subsidiary to help it sustain a blistering pace of investment.
The Suwon-based electronics company signed a deal with Samsung Display Co. to borrow 20 trillion won at a 4.6% interest rate, the company said in a regulatory filing Tuesday. The loan matures Aug. 2025 and its purpose is to secure working capital, according to the filing. Samsung Electronics owns 85% of Samsung Display.
Samsung said in January that it intends to keep its capital expenditure this year in line with 2022 — when it spent $39 billion on its chipmaking efforts — defying expectations that it would cut back as peers like SK Hynix Inc. and Micron Technology Inc. had done in prior weeks. But executives at Korea’s biggest company said the dour market situation and weak consumer sentiment presented an opportunity to make early investments in future technology and production capacity.
Read more: Samsung Defies Chip Downturn With Aggressive Capital Spending
The company warned the smartphone market would shrink again in 2023 after a double-digit decline in 2022. As the world’s most prolific maker of phones, memory and displays, all three of Samsung’s core business units are heavily reliant on buoyant smartphone and server markets, but the company anticipates the long-term trend to be toward greater adoption of technology and its products.
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