Samsung Electronics to invest $18.6 bn in S Korea
04 July 2017
Samsung Electronics Co Ltd today said it would invest at least $18.6 billion in South Korea to extend its lead in memory chips and next-generation smartphone displays, creating almost half a million jobs.
According to commentators, the investment underscored Samsung's determination to increase its lead in memory chips, which were expected to propel Asia's third most-valuable company to record profit this year.
Samsung invests over $10 billion in chips annually, to stay ahead of competitors such as cross-town rival SK Hynix Inc and Japan's Toshiba Corp.
The announcement comes after repeated calls from new South Korean president Moon Jae-in for big businesses to invest more domestically in order to create more jobs. According to Samsung, its plan could add 440,000 roles by 2021.
The huge investment is also likely to alleviate shareholder fears of major decisions being delayed in the absence of vice chairman Jay Y Lee.
The leader of Samsung Group was on trial charged with bribing former president Park Geun-hye for political favors (See: Samsung chief Jay Y Lee arrested in graft scandal ).
"Samsung is being more aggressive in domestic investments because of the current (political) climate," said Park Ju-gun, head of corporate analysis firm CEO Score.
He added, Samsung also needed to show initiative on the domestic front, after announcing a $380 million plant in the United States, Park said.
After spending 15.6 trillion won on its Pyeongtaek plant south of Seoul, total investment in the facility will rise to 30 trillion won by 2021, Samsung said in a statement today.
The Suwon-based company will also commit 6 trillion won for expansion of production in Hwaseong while it also considered a new display manufacturing site for organic light-emitting diodes by 2018 and a second production line at Xi'an in China.