Samsung Group plans to raise spending by more than 30% to ₩450-trillion (about R5.7-trillion) over the next half a decade to 2026 to shore up businesses from chips to drugs as South Korea’s conglomerates grapple with growing economic and supply shocks.
The conglomerate — whose units from Samsung Electronics to Samsung Biologics dominate Korea’s economy — promised in a statement to create 80 000 jobs through to 2026, mostly in semiconductors and biopharmaceuticals.
Samsung, run by the scion of one of Korea’s oldest and wealthiest families, is one of a handful of so-called chaebol that are outlining investment plans as the country’s new president takes office. President Yoon Suk Yeol, who began his five-year term on 10 May, has been a vocal supporter of the conglomerates and has made them a key pillar in his economic growth plans.
The group is focusing particular attention to Samsung Electronics, the crown jewel of a multibillion-dollar sprawling empire that spans shipbuilding, technology, healthcare and finance. The world’s largest maker of smartphones, displays, memory chips and consumer appliances unveiled plans last year to invest US$151-billion through to 2030 to delve deeper into advanced chipmaking. Much of that will go towards its semiconductor division, which is expanding rapidly in an effort to compete with Intel and Taiwan’s TSMC in making chips for global names such as Nvidia and Qualcomm.
Samsung Group’s latest investment blueprint, which overlaps with public pledges made in 2021, comes about a year after family scion Jay Y Lee walked out of jail. The conglomerate’s leader, who was serving a sentence on graft charges, was paroled just months ahead of presidential election earlier this year.
Along with the heads of other prominent chaebol including the Hyundai and SK groups, Samsung is expected to shoulder part of the responsibility for driving growth in a country dealing with rising inflation and supply-chain disruptions due to the pandemic and war in Ukraine. Samsung Electronics and SK Hynix had pledged more than ₩510-trillion of investment in semiconductor research and production in the years to 2030 under a national blueprint devised by the previous president’s administration.
In a statement, the group said about ₩360-trillion will be spent domestically while the rest will be invested overseas. Samsung Electronics is building an advanced, $17-billion US chip plant in Texas, a win for the Joe Biden administration as it prioritises supply-chain security and greater semiconductor capacity on American soil. Last week, President Biden stopped by Samsung’s most advanced chipmaking facility on his first trip to Asia as US president, hailing joint efforts on safeguarding supply-chain security. — Shinhye Kang, (c) 2022 Bloomberg LP