Samsung ‘back in game’ with W180tr investment plans
Tech titan to hire 40,000 employees, invest in new AI, 5G, pharmaceuticals, car electronics
Published : Aug 8, 2018 - 14:16
Updated : Aug 8, 2018 - 16:48
Samsung Electronics on Wednesday unveiled an investment plan worth 180 trillion won ($161 billion) for new growth industries and job creation, marking the largest investment scheme under the command of Vice Chairman Lee Jae-yong, while offering an olive branch to the anti-chaebol government.
The plan, which includes investments for domestic industrial infrastructure and creation of 40,000 new jobs over the next three years, came two days after a visit by Korea’s top economic policymaker, Kim Dong-yeon, to a Samsung Electronics’ semiconductor plant Monday.
Samsung is following in the steps of other conglomerates that have released investment proposals in sync with government visits, including Hyundai Motor, LG, SK and Shinsegae Group, whose combined investment volume for the next three to five years extends to about 130 trillion won.
Samsung Electronics Vice Chairman Lee Jae-yong (front right) talks with Deputy Prime Minister and Minister of Finance Kim Dong-yeon during his visit to the tech giant’s Pyeongtaek plant in Gyeonggi Province on Monday. (Yonhap)
Of the 180 trillion won, 130 trillion won is to be used for domestic investments, which will largely be allotted for the establishment of infrastructure for Samsung’s business-to-business efforts, including production facilities for semiconductors and display manufacturing.
Some 25 trillion won will be spent on artificial intelligence, the fifth-generation network, biopharmaceuticals and car electronics, which are deemed Samsung’s four new growth businesses.
In AI, Samsung plans to significantly expand its research capability, increasing the number of advanced AI researchers to 1,000 across its global AI Centers.
Samsung also aims to become a leader in electronics components for future cars such as system-on-chip for autonomous driving, utilizing its leadership in semiconductors, telecommunications and display technologies. De facto leader Lee Jae-yong just returned from a trip to Europe on Sunday following meetings with European carmakers.
Biopharmaceuticals is another sector of Lee’s keen interest.
Samsung has seen strong growth from both its contract manufacturing and biosimilar businesses. It will continue to invest heavily, including developing and manufacturing biosimilars to combat chronic and difficult-to-cure diseases, according to the plan.
Along with the new investment, Samsung expects to create 40,000 new jobs over the next three years.
It is an expansion from the company’s previous employment of between 20,000 and 25,000 for the past three years, reflecting Samsung’s commitment to support youth employment.
Such a job plan is expected to help induce approximately 700,000 jobs in related industries and businesses, either directly or indirectly.
Part of the indirect job creation effect will come from the company’s expansion of its internal venture incubation program, C-Lab, which was introduced in 2012 to support external startup projects.
The platform will benefit 500 projects -- 300 external candidates and 200 inside the company -- in the next five years to encourage innovations and entrepreneurship.
In conjunction with the Korean government, Samsung will also set up and operate software education centers across the country, which will nurture much-needed software talent and help create new job opportunities
The centers will train 10,000 students and job candidates and provide employment consulting services for the next five years, it said.
Samsung will also increase the scale of its “Smart Factory” program, an initiative that provides automation solutions and intelligent upgrades for small and medium-sized enterprises’ manufacturing facilities.
Samsung and the Korean government will jointly set up a new fund of 110 billion won to help 2,500 SMEs over the next five years.
Samsung explained that the main purpose of the latest investment and job expansion plan is to keep its competitive edge in existing businesses over global rivals and secure leading positions in emerging businesses for future growth.
The investment plan is centered on Samsung’s contribution to the sustainable growth of the national economy and creating a win-win situation between Samsung and smaller businesses as well as young Koreans, according to a Samsung official.
The timing of Samsung’s investment announcement had drawn attention following reports of alleged disagreements among the administration over Prime Minister Kim’s Samsung visit.
According to reports, Samsung had initially planned to announce the investment scheme on the occasion of the Kim-Lee meeting, but the plan was put off following controversy surrounding alleged expressions of concern from Cheong Wa Dae.
While Cheong Wa Dae later explained it was merely an exchange of views, news reports speculated the presidential office had urged Kim to refrain from being perceived as “begging” for investments on his conglomerate visits.
By Song Su-hyun (firstname.lastname@example.org)
Oct 14, 2018