Deputy Prime Minister-Minister Kim Dong-yeon of the Ministry of Economy and Finance (MOEF) shakes hands with Samsung Electronics Vice Chairman Lee Jay-yong while touring Samsung Electronics¡¯ plant in Pyeongtaek, south of Seoul, on Aug. 6. (Photo: MOEF)
Samsung Group announced a plan to plunk down 180 trillion won and create 40,000 new jobs over the next three years, the largest-ever investment and job creation drive in Korea.
Samsung will focus investments on its conventional mainstay business segments - semiconductors, displays, and smartphones - as well as four top growth engines - AI, 5G, bio, and automotive application components. The plan calls for 180 trillion won in investments overall, surpassing the originally-planned 100 trillion won. It means that Samsung will reinvest most of the operating profits it will earn in the next three years.
Samsung came up with the massive investment plan following President Moon Jae-in¡¯s call for more private sector investments and job creation in Korea during his meeting with Samsung Electronics Vice Chairman Lee Jay-yong at a ceremony to dedicate a new smartphone plant in India on July 9.
The move may be construed as an expression of Samsung¡¯s determination to spearhead its social responsibility through massive investment and job creation amid the prolonged domestic recession and the worst-ever youth jobless rate.
More than 70 percent of the 180 trillion won Samsung will pour will be made in Korea. Samsung has decided to double down the original plan of creating 20,000 to 25,000 jobs in the next three years, raising the target to some 40,000 jobs, contributing to the government¡¯s efforts to create new jobs.
On top of Samsung¡¯s investments to secure future growth engines and manpower, society¡¯s high expectations on Samsung¡¯s role in invigorating the national economy has been considered, a ranking Samsung official said. The board of directors of each subsidiary has decided the size of investments and job creation it can implement without fail, he added.
Samsung plans to aggressively open technology capabilities and knowhow the company owns to the outside to contribute to SMEs¡¯ growth and to build ground work to create jobs for youth. Samsung also plans to nurture 10,000 youth software manpower and expand its fund for shared growth with SMEs to 4 trillion won.
Samsung was originally scheduled to announce the investment plan when Deputy Prime Minister-Minister of Economy and Finance Kim Dong-yeon toured Samsung Electronics¡¯ plant in Pyeongtaek on Aug. 8, but the plan was put on hold as a controversy flared up over a perception that the government was begging for conglomerates to make investments and create jobs.
Out of 180 trillion won in investments, 100 trillion won will be poured in the semiconductor segment. Semiconductor demand is surging not only in PCs and smartphones, but also in such new industry areas as AI, self-driving technologies, and cloud computing.
Samsung Electronics is being pursued by companies in China, which has declared a policy goal of semiconductor self-sufficiency with the full support from the Chinese government. Given the market trend changes, Samsung plans to pour more than 30 trillion won in a 2nd semiconductor plant in Pyeongtaek, whose project will break ground this year. Plans on the construction of 3rd and 4th semiconductor production lines may be advanced according to market situation changes.
Samsung plans to dramatically increase R&D expenditures to secure future technologies. Samsung poured an annual average of 14.75 trillion won in the R&D sector between 2012 and 2017. Samsung plans to set aside about 4 trillion won to 5 trillion won more in each of the next three years.
Samsung will accelerate efforts to cultivate manpower and promote technology commercialization by investing 1.5 trillion in such basic science segments as mathematics, physics and chemistry by 2022.
In the AI, 5G, bio and automotive application components - four future growth engines - Samsung will set aside 25 trillion won in investments. Samsung plans to hire 1,000 gifted researchers in six AI research centers in Korea, the United States, the United Kingdom and Russia.
Samsung is eying bio as a 2nd legend of semiconductor. Samsung BioLogics plans to put a 3rd plant in Songdo, Incheon, into commercial operation by 2020 with the goal of becoming the global No. 1 bio production company. The company is aggressively considering launching a project to build a 4th plant.
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