Samsung Electronics is the leading supplier of memory chips and other semiconductor products. It has been heavily investing in the expansion of its production facilities as demand for memory products, particularly High Bandwidth Memory, is expected to rise in the coming quarters.
There are many subsidiaries that operate under Samsung Electronics. Samsung Display is one of them. It's the dominant supplier of mobile OLED panels and is also a competitive force in other display technologies. The display maker has announced its first dividend which nets Samsung Electronics 5.64 trillion won or $4.3 billion. The remaining 15.2% stake is owned by Samsung SDI.
Samsung to use the $4.3 billion dividend for enhancing chip production
Samsung Electronics has an 84.8% stake in Samsung Display, so when the company announced a dividend for its stockholders, this also meant that Samsung Electronics would get money as well. The chipmaker will get $4.3 billion that it will use to expand its semiconductor production facilities.
Samsung Display approved its dividend payment at the general shareholders meeting on March 19. This is the first time that Samsung Display has decided to make a dividend payout since it spun off into a separate entity from Samsung Electronics back in 2012.
The conglomerate has been tapping into its subsidiaries and overseas affiliates to bring cash back to South Korea for investing into semiconductor production. It has collected more than $25 billion in dividends from Samsung affiliates overseas and has also taken a loan of more than $15 billion from Samsung Display last year.
There's also the expectation that Samsung Electronics may issue corporate bonds this year to raise significant sums for further investment in its semiconductor production.
