Samsung plans $205B investment in strategic industries, including semiconductors

Samsung Electronics Ltd. said Tuesday it’s planning to invest 240 trillion won, or about $205 billion, into its businesses over the next three years as part of an effort to become a global leader in what it calls “strategically important industries.”

The company said those industries include semiconductors, the importance of which is only too clear with this year’s shortages plaguing the world, plus telecommunications, biopharmaceuticals, and emerging areas such as artificial intelligence and robotics.

The money will be used to create about 40,000 new jobs, the company said, with 180 trillion of the total to be spent in South Korea, no doubt providing a huge boost to its home nation’s economy.

Samsung is apparently no stranger to big investments like this. It said it spent about 180 trillion won in capital expenditure and research and development from 2018 to 2020.

In a statement today, the company said the increased investment will make Samsung a leader in the strategically important industries it has earmarked, enabling it to pivot for what it says will be “great changes in industry, international order and social structure after the COVID-19 pandemic.”

With respect to semiconductors, Samsung is looking to invest in advanced processes that will help it to maintain its leadership in the memory chips industry and become a leader in logic chips. It said “aggressive investment” is necessary for the chipmaking business because of the current global climate around the industry.

The global chip shortage that began with the pandemic has ushered in a wave of investment in the semiconductor industry, notable in the U.S., where President Joe Biden’s administration is planning to invest $50 billion to boost chip manufacturing. Meanwhile, the European Union has stated it wants a 20% global market share of the chip industry by 2030, partly to reduce its reliance on other countries, and China is also said to be boosting its R&D budget advanced tech, including chips, by 7% every year through 2035.

Taiwan Semiconductor Manufacturing Co., Samsung’s biggest rival in the chip space, has also increased its spending.

Samsung underscored the importance of its lead in certain segments of the semiconductor industry, saying it acts as the South Korean economy’s “safety net,” accounting for a massive 19.3% of the country’s exports in 2020. As such, Samsung is framing its huge investments as a post-pandemic “survival strategy” for the nation.

In telecommunications, Samsung’s spending there will be focused on software that aims to make networks more intelligent. It plans to up its investments in R&D and hire more employees with experience in virtualized networks and open base stations, it said. The company added that it will continue to strengthen 5G networks while also preparing for the 6G era that will replace them.

Samsung’s biopharmaceutical ambitions are bold too. The company’s affiliates, Samsung Biologics and Samsung Bioepis, plan to expand their contract manufacturing businesses by building two new plants. Ultimately, Samsung intends to command a 30% share of the global biopharmaceutical contract manufacturing market by 2023. The plans also call for Samsung’s affiliates to get into areas such as vaccine contract manufacturing, as well as cellular and gene therapy products, the company said.

As for its work in AI and robotics, it will cover the development of new display applications, solid-state batteries and high-energy density batteries, the company said.

Photo: Samsung