Samsung's next move: A $22 billion bet on new tech

Todd Singleton
August 11, 2018

South Korea's Samsung will invest 25 trillion Won ($22.3 billion) in technologies including artificial intelligence (AI) and 5G as it tries to fend off the challenge from global rivals and address investor concern about its long-term prospects.

The Korean tech giant also announced a set of initiatives aimed at building the ecosystem of innovative businesses for the digital economy. The company also made a decision to directly hire 40,000 more employees in the cited period.

Consumption has slowed, unemployment is rising and investment has cooled since he came to power a year ago. Still, the company said its chip business continued to do well.

With his case to be reviewed by the Supreme Court, coupled with incumbent President Moon Jae-in's drive to impose tougher restrictions on family-controlled conglomerates, industry watchers said Lee sought to recover the group's public reputation and build a better relationship with the government through the investment.

By drawing on its well-established expertise in technology and start-up investments, Samsung will open up its venture incubation program to both external and internal start-up projects and provide software training.

The company's investment will especially focus on emerging industries, such as artificial intelligence, fifth-generation network and bio technologies.

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Samsung's second quarter profit dipped slightly to 11.04 trillion won, down from 11.05 trillion won a year earlier.

The world's largest manufacturer of semiconductors and smartphones said it will greatly increase the number of its staff.

The company has been hit by a series of scandals in recent years. It reflected Samsung's commitment to support youth employment, Samsung said in a statement.

Samsung will moreover forge ties with the Ministry of SMEs and Startups to raise 110 billion won over the next five years to help 2,500 companies adopt smart-factory solutions in their production lines. Mr Lee, who has led Samsung since his father fell ill in 2014, denies wrongdoing and has appealed the ruling.

The company plans to foot 60 billion won of the total to be spent. Those areas are seen as Samsung's new growth engines.

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