Samsung Plans Big Investments in Artificial Intelligence and Biopharma

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August 10, 2018

Samsung Electronics Co Ltd said it plans to boost investments in businesses that will drive its future growth, committing to a KRW25 trillion (about US$22 billion) investment over the next three years, primarily led by Samsung Electronics, in the areas of artificial intelligence, 5G, automotive electronics components, and biopharmaceuticals.

Samsung will open up its venture incubation program to both external and internal start-up projects and provide software training.

In artificial intelligence, Samsung plans to significantly expand its research capability, increasing the number of advanced AI researchers to 1,000 across its global AI Centers. It will also invest aggressively to become a global player in the advanced markets for 5G chipsets and related devices and equipment.

For biopharmaceuticals, Samsung said it has seen strong growth from both its contract manufacturing and biosimilar businesses. It will continue to invest heavily in the businesses, including developing and manufacturing biosimilars to combat chronic and difficult-to-cure diseases.

Separately, Samsung said it will increase its existing support of basic sciences to identify new growth opportunities, while widening the program to include areas of future technologies such as AI, 5G, Internet of Things and biopharmaceuticals.

Overall, Samsung said it plans to invest a total of KRW180 trillion (about US$159.4 billion) over the next three years, including the spending on future growth businesses. The amount includes capital expenditures and R&D investments, and KRW130 trillion (about US$115 billion) out of the total will be spent in Korea.

In semiconductors, Samsung said will expand investments in manufacturing hubs, including in Pyeongtaek, to maintain global technology leadership and meet significant new demand from applications in AI, 5G, data centers and automotive electronics. In addition to investments for memory products, spending will include those for non-memory and new advanced manufacturing equipment.

For displays, investments will be increased to develop high-value, differentiated products amid rising competition in the industry.

Samsung expects to create 40,000 new jobs over the next three years. This includes generating up to 20,000 additional new jobs on top of previous hiring plans.

Along with the direct employment, the investment in Korea is expected to help induce approximately 700,000 jobs in related industries and businesses, it said.

Samsung said it will expand its internal venture incubation program, C-Lab, which was introduced in 2012, to support external start-up projects. The platform will benefit 500 projects—300 external candidates and 200 inside the company—in the next five years to encourage innovations and entrepreneurship.

In conjunction with the Korean government, Samsung will also set up and operate software education centers across the country, which will nurture much-needed software talent and help create new job opportunities. The centers will train 10,000 students and job candidates, and provide employment consulting services for the next five years.

Additionally, Samsung will strengthen joint research with leading higher education institutions in the area of semiconductor and other core technology.

Samsung will boost its supplier support programs to a total of KRW4 trillion (about US$3.5 billion, extending financing to more sub-contractors in the lower-level supply chain and increasing incentive payments. These programs will not only create stability within the supply chain, but also facilitate improvements within the partners.

Samsungalso will increase the scale of its “Smart Factory” program, an initiative that provides automation solutions and intelligent upgrades for small and medium enterprises’ manufacturing facilities.

The program has already helped 1,086 manufacturers switch to smart factories and create 4,600 jobs between 2015 and 2017, by improving productivity and generating growth. Samsung and the Korean government will jointly set up a new KRW110 billion (about US$97.4 million) fund to help 2,500 SMEs for the next five years.

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