Samsung Plans $22 Billion Spending On New Tech
Samsung Group will invest 25 trillion won ($22 billion) in artificial intelligence, 5G mobile technology, electronic components for autos, and the biopharmaceutical business in pursuit of new growth areas, Samsung Electronics said on Wednesday.
In flagging specific areas of investment, the plan is the first of its kind for the conglomerate and suggests more emphasis than usual on expanding into new segments as its core semiconductor and smartphone businesses show signs of weakness, according to Reuters.
The investment is also part of a bigger 180 trillion won three-year plan to create jobs and secure fresh revenue streams, providing the first hint of direction for Samsung since group heir Jay Y. Lee was released from jail in February on a suspended sentence following a conviction for bribery. He is appealing the conviction.
“The total investment size is not surprising. But Samsung can be more active in M&As to do better at AI or 5G, when Lee is fully back to his business,” Greg Roh, an analyst at Hyundai Motor Securities, said.
Samsung Electronics said the announcement followed “many months of deliberations and review” by the group.
Samsung Electronics, the world’s top maker of memory chips and smartphones and the group’s flagship company, did not provide a breakdown of the figures but said it will provide the funds for most of the investment.
It said the group plans to significantly expand artificial intelligence (AI) research capability, increasing the number of advanced AI researchers to 1,000 across its global AI centers, and heavily invest in biopharmaceuticals.
“Samsung has seen strong growth from both its contract manufacturing and biosimilar businesses. It will continue to invest heavily in the businesses, including developing and manufacturing biosimilars,” the statement said.