Samsung committed to a KRW25 trillion ($22.3 billion) investment over three years in areas including artificial intelligence (AI) and 5G, which it hopes will drive its future growth.
The company said the sum is part of a total planned investment of KRW180 trillion, which Reuters reported marks a 6 per cent increase in its spending over the last three years.
Samsung also announced initiatives intended to make it “a leading force in building and energising the ecosystem of innovative businesses for the digital economy”. It will open its venture incubation programme to include both external and internal start-up projects, and provide software training.
In a statement, the South Korean company said it expects innovations powered by AI will drive industry transformation, while 5G will create new opportunities in autonomous driving, IoT and robotics. Its investment plans include increasing the number of AI researchers in its global centres to 1,000.
Samsung’s move is not surprising; the firm’s IT and mobile communications division suffered a sharp decline in second quarter revenue due to lower than expected sales of the Galaxy S9 and S9 Plus in a stagnant high-end smartphone market. Weak smartphone sales led to the unit posting a 20 per cent year-on-year drop in revenue to KRW24 trillion ($21.3 billion).
Samsung therefore needs to diversify in order to shape itself for future growth.
Other areas of focus include becoming a leader in electronics components such as SoCs for autonomous vehicles using Samsung’s semiconductors, telecoms and display technology skills. It is also working in biopharmaceuticals, where it said it saw “strong growth for both its contract manufacturing and biosimilar businesses”.
Samsung is expanding its internal venture incubation programme, C-Lab, to support external startups. It will be available for 300 external and 200 internal projects over the next five years.
In conjunction with the government, it will set up and operate software education centres across the country, which will train 10,000 students and job candidates, and provide employment consulting services for the next five years.
Samsung also plans to strengthen joint research with higher education institutions in the area of semiconductor and other core technology.
Also in the pipeline is a boost to supplier support programmes to a total of KRW4 trillion; extending financing to more sub-contractors in the “lower-level supply chain”; and increasing incentive payments. This, it said, will “not only create stability within the supply chain, but also facilitate improvements within the partners”.