Samsung Electronics plans to spend a whopping $22 billion over the next three years on artificial intelligence, auto components and other future businesses as the company maps out its strategy under the restored leadership of Vice Chairman Lee Jae-yong after he was freed from prison.
Samsung said it will spend the sum, amounting to 25 trillion won, on increasing the number of artificial intelligence researchers to 1,000 at its artificial intelligence centers around the world, ensuring it will be a global player in next-generation telecoms technology called 5G and on deepening its involvement in electronic components for future cars.
The announcement on Wednesday by South Korea’s biggest business group was welcome news, coming at a time of deepening unease over slowing growth in Asia’s fourth largest economy.
It also highlights that South Korea’s decades-old reliance on big businesses for jobs and investments is unlikely to end anytime soon since the country lacks a strong pool of small and medium-sized companies found in Japan or Germany.
"Samsung expects innovations powered by AI technology will drive the industry’s transformation, while the next-generation 5G telecommunications technology will create new opportunities in autonomous driving, the Internet of Things (IoT) and robotics," the company said in a statement.
Some of the funding will go to Samsung’s biopharmaceutical businesses. Samsung has been beefing up its contract drug making operations to help counter a potential decline in its mainstay electronics businesses.
South Korea relies heavily on Samsung and its affiliated companies for investment and jobs, even after a corruption scandal that resulted in Lee’s conviction for bribery. Lee was freed after nearly a year in jail but former President Park Geun-hye and a close associate remain imprisoned for bribery and other charges.
Including the latest plan, spending by Samsung Electronics and its affiliates on research and development and capital expenditures over the next three years will amount to 180 trillion won ($161 billion), Samsung said. Of that total, 130 trillion won will stay in South Korea, the company said. The rest will likely be distributed to China, Vietnam and other production lines overseas.
Samsung also said on Wednesday that it plans to create 20,000 more jobs over the next three years, on top of a previously announced 20,000 new jobs. The new investment is expected to indirectly lead to about 700,000 jobs in related industries and businesses in South Korea, Samsung said without giving a time frame.