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Samsung To Invest $22bn In AI, 5G, Others

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Samsung Group will invest $22 billion in artificial intelligence, 5G mobile technology, electronic components for autos, and the biopharmaceutical business in pursuit of new growth areas.

In flagging specific areas of investment, the plan is the first of its kind for the conglomerate and suggests more emphasis than usual on expanding into new segments as its core semiconductor and smartphone businesses show signs of weakness.

The investment is part of a bigger 180 trillion won three-year plan to create jobs and secure fresh revenue streams, providing the first hint of direction for Samsung since group heir Jay Y Lee was released from jail in February on a suspended sentence following a conviction for bribery. He is appealing the conviction.

“The total investment size is not surprising. But Samsung can be more active in M&As to do better at AI or 5G, when Lee is fully back to his business,” said Greg Roh, an analyst at Hyundai Motor Securities.

Samsung Electronics said the announcement followed “many months of deliberations and review” by the group.

Samsung Electronics, the world’s top maker of memory chips and smartphones, and the group’s flagship company, did not provide a breakdown of the figures but said it will provide the funds for most of the investment.

It said the group plans to significantly expand artificial intelligence (AI) research capability, increasing the number of advanced AI researchers to 1 000 across its global AI centres, and heavily invest in biopharmaceuticals.

“Samsung 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,” the statement said.

The announcement sent shares in contract drug-maker Samsung BioLogics up 7 percent. Shares in the group’s information technology services affiliate Samsung SDS rose nearly 6 percent. Samsung Electronics shares were little changed.

The 180 trillion won plan includes capital spending as well as research and development in chips and displays and marks a 6 percent increase from its spending over the past three years.



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