Samsung to invest billions in new tech to drive fresh growth
South Korea's Samsung Group on Wednesday said it would invest $22 billion over the next three years in cutting-edge technology including artificial intelligence, self-driving cars and biopharmaceuticals, as it searches for ways to drive future growth.
The investment will be primarily led by Samsung Electronics, the world's biggest maker of memory chips, which has faced a string of setbacks in recent years, including a fall in smartphone sales and a corruption scandal that saw its vice-chairman Lee Jae-yong jailed last year.
Although demand for its memory chips remains robust, the market for its smartphones appears to have hit a wall, prompting the company to search for fresh growth opportunities.
"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.
Overall, the group plans to invest a total of 180 trillion won ($161 billion) over the next three years across its businesses, with more than 70 percent of the funds to be spent in South Korea.
It will expand investments in manufacturing hubs, seeking to increase production of semiconductors and display screens as well as dominate new markets by developing technology to power self-driving cars.
The company said it expected to add 40,000 new jobs over the next three years, in news that will likely bring relief to South Korea's government which is currently struggling with high youth unemployment.
The announcement came two days after South Korean Finance Minister Kim Dong-yeon met the group's de-facto head Lee, calling for Samsung to create new jobs and boost the economy.
The scion of the founding family, Lee was jailed last year for his part in the graft scandal that brought down former president Park Geun-hye.
He has since been released after some of his convictions were quashed on appeal, and is now awaiting a Supreme Court decision.
Critics say Kim's meeting with Lee may send a wrong signal to the court that the government backs leniency for the beleaguered businessman.
Samsung's second quarter profit dipped slightly to 11.04 trillion won, down from 11.05 trillion won a year earlier.
Total sales for April-June fell 4.1 percent year-on-year to 58.48 trillion won, with revenues for the company's mobile division plunging 22 percent in the same period.
Follow Emirates 24|7 on Google News.