Samsung Group will invest 25 trillion won ($22 billion) in artificial intelligence, 5G mobile technology, electronic components for autos, and the biopharmaceutical business in pursuit of new growth areas, Samsung Electronics (005930.KS) said on Wednesday.
The investment is also part of a bigger 180 trillion won three-year plan to create jobs and secure fresh revenue streams, providing the first hint of direction for Samsung since group heir Jay Y. Lee was released from jail in February on a suspended sentence following a conviction for bribery.
Industry watchers said the company's latest investment plan is set to focus on building Samsung's capabilities in the chip segment, as global rivals, especially those from China, have been trying to catch up. 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. The company did not indicate how many of its 320,671 employees (as of December 2017) are now involved in AI.
The semiconductor business is a particularly lucrative division of Samsung as it has been driving the bulk of its revenues over the past few years.
Samsung is also looking to be a front runner in the 5G race. In addition to investments for memory products, spending will go to non-memory and new advanced manufacturing equipment. The centres will train 10,000 students and job candidates, and provide employment consulting services for the next five years.
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The Slovenian immigrants, a former vehicle dealer and textile factory worker, had been living in the U.S.as permanent residents. Viktor Knavs was a auto salesman in the Slovenian town of Sevnica, while his wife Amalija worked at a textile factory.
The company has been hit by a series of scandals in recent years.
Its C-Lab in-house incubator will back 500 projects, 300 external and 200 internal, to help foster new kinds of solutions and businesses.
Samsung financing will be extended to a larger number of subcontractors, with KRW4 trillion ($3.6 billion) to be made available in total through supplier support programs.
The announcement has had little impact on Samsung's share price but should be welcomed by investors anxious about the lack of strategic direction since the conviction of group heir Jay Lee on bribery charges past year. Samsung said it will recruit some 1,000 researchers for its South Korea-based AI research center going forward.