According to the news report by Bloomberg, Samsung is planning to invest 180 trillion won ($161 billion) in technology to help with South Korea’s growth. The company is looking at ramping up on producing memory chips as well as other tech products that are critical to the growth of the country’s economy.
According to Samsung Electronics Co., the conglomerate’s crown jewel, this investment will give a huge boost to spend on research and development in artificial intelligence, bio-pharmaceuticals, 5th generation wireless networks, semiconductors, displays and other relevant sectors over a period of three years.
The company stated that most of these investments (around 130 trillion won – about $116 billion) would be made domestically. The company did not give further breakdowns about how this money would be disbursed and what it would be used for.
However, the company increase the number of researchers to one thousand in its Artificial Intelligence centers located in the UK, South Korea, Russia, Canada and the United States.
The de fact head of Samsung, Jay Y Lee met with the South Korean Finance Minister Kim Dong-yeon at a chip plant just outside Seoul, the day after which this announcement was made.
The South Korean major had posted record earnings for 2017 and is the global leader in the manufacture of semiconductors and smartphone sales. The company is also the supplier of displays for Apple’s iPhone X.
According to DB Financial Investment’s analyst Kwon Sung-ryul, at this time, Samsung has coffers full of cash, however, there are also political implications to this announcement with the government is calling for corporates across the country to create jobs and bringing investments back home.
The political side to this investment is that the company is giving its support to the South Korea’s President Moon Jae-in at a time when his approval ratings have been decreasing due to a slowing economy.
Public consumption has gone down, unemployment is on the rise once again and investments have reduced since Moon came into power in 2017. With this announcement, Samsung said that it will be hiring around 40,000 people, while also creating another 70,000 jobs around the country.
Interestingly, Samsung has the reputation of pushing ahead with investments even while its competitors prepare themselves for a slowing down in the economy. This is one of the strategies that has helped the conglomerate become the world’s biggest microchip manufacturer, despite going through one obstacle after another.
In fact, despite all the roadblocks the company has faced, Samsung has just completed building the world’s biggest smartphone factory just outside the Indian capital city of New Delhi. This is a huge step the company has taken considering the fact that its market share in China has been impacted by competition from the upcoming Chinese smartphone manufacturers such as Huawei, Vivo, Oppo and Xiaomi. The biggest competition South Korean giant faces comes from Huawei, which just beat Apple to the number two spot in the global smartphone market and is not eyeing Samsung’s number one position.
Samsung’s Vice Chairman Lee met President Moon Jae-in at the inauguration of the company’s Indian factory. This was the first time the two met after Lee was released on a suspended jail sentence in February.
Lee had been incarcerated on charges of graft corruption for bribing the friend of the previous South Korean President, Park Geun-hye. He then spent one year in a lockup at a prison facility which is located south of Seoul. Lee, however, denied all charges and is currently fighting the ruling. Lee has also been running the company since his father fell sick in 2014.