Korean Economy News
Samsung Elec pledges $116bn capex in Korea next 3 years

By Hwang Hyung-kyu and Lee Eun-joo

Samsung Group’s flagship Samsung Electronics on Wednesday pledged 180 trillion won ($160.7 billion) spending - 130 trillion won in Korea - in its mainstay semiconductor operation as well as new growths of artificial intelligence, automated and connected technologies, and bioengineering over the next three years to help create 700,000 jobs.

The ambitious plan including direct hiring of 40,000 comes as facility investment has been in the longest slump this year in 18 years while job additions are at their worst in a decade to prompt the liberal government known to be hostile towards chaebols to ask for more hiring and investment from the country’s richest and one of the world’s biggest technology companies.

“We have decided to boost new investment and hiring to help revitalize the economy and promote new industries,” the company said in a statement.

Its shares gained 0.21 percent to close at 46,800 won in Seoul trading on Wednesday.

Of the total investment, 72 percent or 130 trillion won will be spent in the country, which will have the effect of creating up to 700,000 new jobs.

The spending would amount to 43 trillion won annually, about the same level of Samsung Electronics’ record 43.4 trillion won spending last year - which was the largest-ever annual spending for any publicly trading company in 2017- after finishing its best-ever year due to memory chip boom.

The bulk will go to uphold its competitive edge in chips and displays. About 25 trillion won will be spent on new growth areas of artificial intelligence, 5G connection, biopharmaceutical, and automotive electronics.

It will increase payroll by 40,000 over the next three years, nearly doubling from the original plan of 20,000 to 25,000.

The company also pledged to help create a so-called innovative ecosystem by sharing innovative capacity through training opportunities to 10,000 young job seekers over the next five years. It will sponsor 500 venture projects.

Samsung also plans to create a 110 billion won fund with the Ministry of SMEs and Startups over the next five years to help transform manufacturing facilities of 2,500 small and mid-size companies into smart ones and help them advance into other markets at home and abroad. Such plan will help create about 15,000 new jobs.

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