Samsung Electronics said yesterday it would more than triple investment in capital spending and research and development this year to a record 26 trillion won (US$22.7 billion), betting on future growth despite questions about the global economic outlook.
Samsung said the investment in new production facilities means it expects to hire 10,000 new workers this year.
The world’s biggest manufacturer of memory chips and flat screen TVs will spend about 18 trillion won on facilities — 11 trillion won for semiconductor manufacturing and 5 trillion won to increase production capacity for LCD panels. It will also spend about 8 trillion won for R&D, it said in a release.
The total dwarfs the approximately 8 trillion won the company spent last year, a figure provided by Samsung spokeswoman Lee Soo-jeong showed.
“Although the global economic environment and business conditions remain changeable and uncertain, if we invest aggressively in expanding facilities and in hiring then these circumstances also present Samsung an opportunity for future growth and to stimulate the economy,” chairman Lee Kun-hee said in the release.
Lee spoke at a groundbreaking ceremony attended by about 500 Samsung executives for a new memory chip plant in the city of Hwaseong, just south of Seoul.
Yesterday’s announcement came after the broader Samsung Group conglomerate said last week it plans to invest 23.3 trillion won over the next decade in technologies, including solar cells and medical devices in a bid to boost sales and expand its work force.
Samsung Group, which consists of dozens of companies in areas including electronics, shipbuilding, finance and fashion, said the money would be spent in five areas: solar cells, rechargeable cells for hybrid electric vehicles, LED technologies, biopharmaceuticals and medical devices.
Moody’s Investors Service hailed that announcement as showing the kind of vision needed to support growth.
“The strategic initiative should have a positive, long-term impact on Samsung Electronics’ credit profile because the global demographics of aging populations in key markets, rising energy costs, and concerns about global warming make the identified industries particularly promising targets for investment,” it said in a statement yesterday.
Samsung’s stock took a hit yesterday, sinking 3.2 percent to close at 784,000 won amid a 2.6 percent sell-off in South Korea’s benchmark stock index as global jitters about Europe’s debt crisis persist.
Lee Kun-hee is widely credited as the driving force behind the rise of Samsung Electronics Co over the past decade or so to the top tier of global technology companies. Convicted of tax evasion and later pardoned by South Korea’s president, he returned to lead Samsung in March after stepping down in April 2008 following his indictment.
Samsung said late last month that net profit surged more than six-fold in the first quarter of this year to a record high 3.99 trillion won on strong demand and higher prices for memory chips as well as increased sales of mobile phones and flat-screen TVs.
In other news, Lee Kun-hee plans to meet with Sony Corp chief executive Howard Stringer next Monday in Seoul, spokeswoman Lee Soo-jeong said. Sony spokeswoman Ayano Iguchi in Tokyo declined to comment.
Seoul’s Maeil Business Newspaper reported the planned meeting yesterday. It said that the two firms were expected to expand their relationship in LCD panels and 3-D. Samsung and Sony formed a joint flat panel venture in 2004.
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