SEOUL: The Samsung group plans to raise spending by more than 30% to 450 trillion won (US$360bil or RM1.58 trillion) over the half-decade to 2026 to shore up businesses from chips to drugs, as South Korea’s conglomerates grapple with growing economic and supply shocks.
The corporate giant – whose units from Samsung Electronics Co to Samsung Biologics Co dominate South Korea’s economy – promised in a statement to create 80,000 jobs through 2026, mostly in semiconductors and biopharmaceuticals.
Samsung, run by the scion of one of South 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 May 10, has been a vocal supporter of the conglomerates and made them a key pillar in his economic growth plans.
Hyundai Motor Group, South Korea’s largest automaker, has announced plans to spend a substantial amount of money in areas including electric vehicles (EVs), robotics, aviation technology and hydrogen-powered vehicles by 2025.
Retail and chemical giant Lotte Group said it will pour a huge amount of funds into boosting the nation’s economy, from hotels and duty-free stores to hydrogen power generation and an EV rental businesses.
“It’s a classic way of South Korean companies to appeal to a new president,” said Park Ju-gun, head of Leaders Index, a Seoul-based research institute.
“Investors need to check whether the promised amount of investments are actually executed or not.”
Along with the heads of other prominent chaebol, 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 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.
The conglomerate is focusing particular attention on its technology flagship, the crown jewel of a sprawling empire that spans shipbuilding, technology, healthcare and finance.
Samsung Electronics, the world’s largest maker of smartphones, displays, memory chips and consumer appliances, unveiled plans last year to invest US$151bil (RM663bil) through 2030 to delve deeper into advanced products.
Much of that will go toward its semiconductor division, which is expanding rapidly in an effort to compete with Intel Corp. — Bloomberg