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Samsung to Pump $3B into Nonmemory Chips

South Korea chipmaker Samsung Electronics on Tuesday announced plans to pump more than $3 billion into its specialized system chips operations over the next five years.

Samsung, which makes DRAM, SRAM and flash memory chips, said the increased investment into its nonmemory chip operations are for system SLI, technology that allows more transistors on a chip for use in digital television sets and home electronic appliances.

Samsung currently trails rivals Texas Instruments and Intel Corp. in the chipmaking sector but, with the new investment, the company is projecting system LSI (large scale integration) sales would exceed $1.8 billion this year, up from $1.4 billion in 2001. By 2007, Samsung expects system LSI operation sales to reach $7 billion.

The company, known primarily as a manufacturer of DVD players, TVs, digital cameras, PCs and color monitors, also announced plans to establish research and development centers in the U.S. and Europe, a move aimed at strengthening its nonmemory chip business.

System LSI, which refers to the placement of thousands of electronic components on a single integrated circuit, is a lucrative business within the semiconductor group and companies like TI and Intel have taken the lead to aggressively pounce on the market for nonmemory chips.

In a statement, Samsung said it would hire experts globally to bump up its research staff to 5,000 by 2007. The company's research workforce now stands at 2,000.