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Behind the Scenes

Samsung in do-or-die race with $355 bn spending plan

The memory chip and smartphone leader is determined to repeat its semiconductor success story in chip foundry, bio and AI

By May 26, 2022 (Gmt+09:00)

2 Min read

S.Korean President Yoon Suk-yeol invites the country's top business leaders to a gathering for small business owners
S.Korean President Yoon Suk-yeol invites the country's top business leaders to a gathering for small business owners

"It's not a matter of numbers, but a matter of do or die for us."

This is the first public remark from Samsung Electronics Co. Vice Chairman and de facto leader Jay Y. Lee on the group's largest-ever, five-year investment plan of 450 trillion won ($355 billion) unveiled on Tuesday.

The spending plan is a whopping 120 trillion won increase from the 330 trillion won it has invested over the past five years. That means the world's top memory chip and smartphone maker will ramp up investments by more than 30% annually through 2026.

"We will look ahead and move forward," he told The Korea Economic Daily on Thursday, in reply to questions about the huge investment plan, ahead of a gathering for entrepreneurs of small- and medium-sized companies hosted by President Yoon Suk-yeol.

Its investment blueprint was announced almost simultaneously with other major South Korean conglomerates, two weeks after President Yoon began his five-year term. Yoon pledged business-friendly measures during his election campaign.

On top of fulfilling a commitment to creating jobs, the investment plan reaffirmed Samsung's firm resolve to solidify its leadership in the memory chip business and strengthen its competitiveness in other growth sectors, including biotechnology, artificial intelligence and 6G telecommunication networks. 

Most importantly, Samsung is determined to overtake foundry leader Taiwan Semiconductor Manufacturing Co. (TSMC) by 2030.

"To maintain its leadership in the growing system (on-chip) market, Samsung needs to step up research and development and hiring," said Park Jea-Gun, a professor of the department of electronic engineering at Hanyang University.

"Lee seemed to be reminding himself and his employees today of the need to have great determination as a latecomer (in the foundry market) to leapfrog TSMC."

Samsung took an 18.3% share of the chip foundry sector in the fourth quarter of last year, far behind TSMC with a 52.1% share, according to TrendForce, a market research firm.

President Yoon hosts a meeting between top South Korean business leaders and SME owners
President Yoon hosts a meeting between top South Korean business leaders and SME owners


The latest spending plan came less than a year after the country's top conglomerate said it would invest 240 billion won in its core businesses such as semiconductor, display and bio sectors for the following three years.

TRAILBLAZER

Lee had urged Samsung employees to trailblaze for its future growth pillars.

"Don't be limited by your challenges, your work will be more rewarding in times of crisis," he said during a strategy meeting to improve product design back in November 2020.

On the first anniversary of the death of his father Lee Kun-hee in November of last year, Lee delivered a memorial service, saying: "The late chairman dove into bold challenges without limits and grew Samsung into what it is now."

Going forward, Samsung may challenge its limits in the sectors of its new fields such as artificial intelligence and biotechnology, where it hopes to repeat its semiconductor success story.

For the biotechnology business, Samsung is striving to expand its foothold in biosimilar and contract development and manufacturing organization (CDMO) projects. 

The tech giant, which deployed the world’s first commercial 5G communication devices, is also aiming to hold its current leadership in networks to 6G and beyond.

Write to In-Yeop Kim at inside@hankyung.com
Yeonhee Kim edited this article.

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