Samsung To Secure Lead on "Strategic Industries" Post COVID-19; Invests US$206 Billion
"Bold" mergers and acquisitions, as well as more investments, are on the horizon for Samsung as it expands its investment to 240 trillion Korean won (US$206 billion) to secure its leadership in various "strategic businesses" over the next three years.
In its presentation on 24 August 2021, the South Korean tech giant plans to use the investment money to maintain its leadership in semiconductors, biopharmaceuticals, artificial intelligence (AI), robotics, next-generation telecommunications and Information Technology.
In particular, Samsung calls for the establishment of a next-generation telecommunication research centre, the strengthening of its research and development capabilities on AI and robotics, the development of its absolute technology capabilities and, most notably, the need for aggressive investment in the semiconductor sector.
The semiconductor industry seems to be on a much higher priority as Samsung calls it as the "safety plate" of the Korean economy and considers the expansion of its investment in this industry as a survival strategy in light of domestic and international "emergency situations". To do so, the company intends to compete for hegemony in the said industry through capitalising on the current plans of the US and the European Union to secure their own supply chain of semiconductors.
The company also added that 180 trillion (US$154.3 billion) of the 240 trillion won planned for the investment expansion will be invested in Korea itself to boost and revitalise the South Korean economy and society as a whole. Samsung hopes that this expansion in its investment, along with its investment in its home country, will fulfil its role as "a company that opens a new future" that also moves forward with society. The company expects that the investment in its home country will create opportunities for young people to solve South Korea's employment problem.
A Nikkei Asia report mentioned that the unemployment rate in South Korea reached 5.4% in January 2021 which is the highest in 21 years due to the economic impact of the COVID-19 pandemic. However, a Statista report of South Korea's predicted unemployment rate showed a sharp then gradual decline in the country's unemployment rate to pre-pandemic levels by 2022. This is something that Samsung may have a hand in due to the jobs its investment expansion will provide, which could be as high as 40,000 jobs within the next three years.
Samsung did not share how much of the remaining sixty trillion won will go to what industry as listed in the investment plan. Samsung also did not say whether the expansion of its investments includes the US$17 billion that will go to a new US chip contract chip factory.
You may recall that Samsung reportedly applied for tax breaks in the US in July 2021 to possibly build the said chip factory in a new location in Texas, which could be used to secure chip production for the US.
Written by John Paul Joaquin