Samsung Group, the South Korean conglomerate with business interests in electronics to biologics, will invest 450 trillion South Korean won (US$360 billion) over the next five years in a bid to revive the economy, Bloomberg reported.
Globally known for its electronics as well as heavy engineering products, Samsung is also the poster boy of chaebol - a South Korean term for a family-owned conglomerate. While Samsung's companies are listed on South Korean stock exchanges and funded using public money, the governance of the companies is dominated by the descendants of the company's founders. As major exporters of goods, these companies also dominate the South Korean economy.
Samsung sets its aim on next-gen tech but not EVs
Samsung's announcement focuses on technology even though the conglomerate's businesses range from shipbuilding to finance. Its flagship company, Samsung Electronics, announced its intent to go beyond displays and smartphones into advanced chipmaking last year. With a financial outlay of $151 billion, the company wants to compete with big names such as Intel and Taiwan Semiconductor Manufacturing Co. in supplying chips to the market.
The company has already invested $17 billion in a chip manufacturing facility in Taylor, Texas, in a bid to strengthen its supply chain. Samsung Group plans to make similar aggressive investments in the biopharmaceutical sector to make the business equally successful. While the details of the investments were not revealed, the Group has stayed away from the electric vehicles business, for now, Reuters reported. The Group's battery unit, Samsung SDI, in partnership with Chrysler's parent firm Stellantis, is expected to announce a new battery plant in Indiana later today.
Politically motivated announcements?
Samsung's announcement is a 30 percent rise in its expenditure and while aimed at boosting the economy, also comes at a time when a new President has taken over the administrative reigns in the country, Bloomberg reported.
Apart from Samsung, other chaebols such as Hyundai Motor Group as well as the Lotte Group have also announced investments in areas such as hydrogen-powered vehicles, EV rental business, robotics, aviation, and hotels, the media outlet said in its report.
Experts told Bloomberg that such announcements are part of efforts to please new office bearers and are not necessarily executed. Samsung had made similar announcements last year after its family scion walked out of jail serving a sentence on graft charges. The new announcement overlaps the promises made last year, including a 510 trillion won investment in semiconductor research through 2030 that was publicized during the previous administration's tenure.
As much as 80 percent of the investments announced by the Samsung Group are expected to be made in South Korea with as many as 80,000 jobs expected to be created over the next five years.