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Samsung Reduces Stake in ASML: Investment Shift Explained"

Source: Samsung Electronics

Seoul, South Korea - Samsung Electronics (KRX: 005930) has significantly reduced its stake in Dutch semiconductor equipment maker ASML(NASDAQ: ASML), signaling a major shift in its investment strategy.

Why it matters:

Samsung Electronics recent reduction of its stake in Dutch semiconductor equipment maker ASML marks a notable shift in investment strategy.

The divestment, part of a series of financial maneuvers, aligns with the company's plan to invest in emerging technology sectors and may signal broader trends in the technology industry.

The Key Points

  • ASML stake reduction: Samsung's stake in ASML decreased from 6.297 million shares (1.6%) in Q1 to 2.752 million shares (0.7%) in Q2, reducing its value from KRW 5.59 trillion (US$ 4.18 billion) to KRW 2.60 trillion (US$ 1.94 billion).
  • Other financial activities: The company also sold shares in Chinese electric vehicle company BYD and South Korean equipment company SFI and raised short-term loans from its subsidiary Samsung Display.
  • Semiconductor investments: These moves are part of Samsung's focused plan to channel investment into semiconductor technology, with planned investments in Pyeongtaek, Gyeonggi Province, and Taylor, Texas, USA.
  • Record investment in R&D and facilities: Samsung spent KRW 7.2 trillion (US$ 5.39 billion) on R&D and KRW 14.5 trillion (US$ 10.85 billion) on capital expenditures in the second quarter, reflecting its continued commitment to maintaining a technological "super-gap."

The Big Picture

Samsung's recent sale of ASML shares, estimated at KRW 3 trillion, demonstrates a calculated move to reallocate funds for strategic investments.

Coupled with a history of carefully planned investments and divestments, including the initial collaboration with ASML in 2012, this is consistent with Samsung's vision to strengthen its position in the global technology landscape, particularly in the semiconductor industry.

Samsung's investment in R&D and facilities, despite a loss of KRW 8.94 trillion in the semiconductor sector in the first half of the year, indicates that it is adhering to a strategy of bold investment in anticipation of a recovery in the semiconductor industry.

In a recent earnings call, Seo Byung-hoon, Vice President of Investor Relations at Samsung Electronics, highlighted the company's strategic direction, emphasizing continued investment in various areas to ensure growth.