Samsung scales up investment, hiring scheme for 2011

Samsung Group plans to spend a record 43.1 trillion won ($38.4 billion) this year to consolidate its global leadership in electronics and shore up its charge into growing fields.

Korea’s largest conglomerate on Wednesday announced its plan to increase investment by 18 percent year-on-year, which analysts say reflects its expectation of global demand recovery.

The conglomerate also said that it would hire up to 25,000 new employees this year, up from 22,500 in 2010.

Of the 43.1 trillion won, an 18 percent increase from last year, 29.9 trillion will be spent on facilities and 12.1 trillion won will be used for research and development. Another 1.1 trillion won is allocated for capital increase of overseas branches and stock investment to secure overseas resources for Samsung C&T Corp.

The announcement of the plan takes place shortly after Samsung Electronics chairman Lee Kun-hee told reporters this week that the group expects to make bigger investments in 2011.

The group also said earlier in May that it plans to inject 23.3 trillion won in five new areas like health care business and solar batteries by 2020.

When looking into the facility investment portfolio, the largest amount of 10.3 trillion won has been allotted for the group’s cash-cow semiconductors, while 5.4 trillion each has been assigned for liquid-crystal displays and organic light-emitting diode (OLED) displays. About 700 billion won and 800 billion won have been allocated for light-emitting diode displays and televisions, respectively.

Involving the hirings, the group claimed it would employ 9,000 college graduates, 5,000 experienced workers and 11,000 workers with technical skills. Up to 4,000 university students will also be hired as interns.

“Although uncertainties remain in the global economy, we decided on the largest-ever yearly investment and hiring in 2011 for the development of the local economy and to enhance global competitiveness of our core projects,” said a Samsung official.

Analysts said making large investments at an early stage for Samsung is in the right direction and that Samsung has found its first new growth engine ― OLED displays.

OLED, made of thin films of organic molecules, could be applied to Samsung’s numerous gadgets, such as tablet PCs, smartphones and smart TVs.

“The 5 trillion won sum planned to be poured into OLED is a meaningful move. It could indicate that Samsung began to see the investment opportunity in nurturing the new future growth engine,” said Shin Hyun-joon, an analyst at Tongyang Securities, adding that about 1.4 trillion won was injected for OLED in 2010.

Song Myung-sup, a senior analyst at Hi Investment and Securities, also said that the early investments planned by the country’s top conglomerate will give the group a boost in case of a sluggish economy.

“Execution of early investment is a method Samsung has been using up to now to increase its competitiveness,” he said.

Involving the fact that the investment portfolio was made official two months earlier than usual, it is most likely that the investments need to be made early this year, as in the case of AMOLED investments, said Song.

By Cho Ji-hyun (sharon@heraldcorp.com)