Samsung splurges $200bn to bring 'new future order' over next few years – meaning chips, pharma, comms
(2021/08/24)
- Reference: 1629814031
- News link: https://www.theregister.co.uk/2021/08/24/samsung_splunks_down_us200b_as/
- Source link:
Samsung announced today it would invest over $200bn (₩240 trillion) in strategic businesses like semiconductors, pharmaceuticals, communication networks, and IT research.
Samsung [1]said this spending spree will help the company "lead" society through the economic and societal challenges of the impending post-COVID industrial, international order and societal structure revolutions.
"The next three years are expected to be a period of reorganization of a new future order," said an English translation of Samsung's canned statement.
[2]
A large part of the investment will go towards hiring youngsters. Three-quarters of the cash will go to employing 40,000 people in South Korea between from now until 2023, the firm said. Samsung's plan is to increase direct employment, provide "educational opportunities", and support startups to capitalize on the innovation of the younger generation.
[3]
[4]
Some of the strategic business focuses are no surprise. Samsung recently overtook Intel to become the world's largest semiconductor supplier in terms of [5]sales for Q2 2021 . The chaebol's [6]memory sales are also dominating the marketplace. In no way does Samsung want to let these footholds go and it needs to keep up with investments by the likes of TSMC, which recently committed $100bn over three years to expand capacity, and Intel, which spent [7]$20bn to expand chipmaking in the US and another [8]$20bn on foundry operations in Europe , although not without a bit of financial help from governments.
[9]Intel, Qualcomm win deal to design 7nm silicon for US defense agencies
[10]Epic lawsuit's latest claims: Google slipped tons of cash to game devs, Android makers to cement Play store dominance
[11]Samsung's foldables fall to more realistic prices and harden up
[12]Samsung sprints past Intel to become world's semiconductor sales leader
[13]GOP lawmakers ask for former Huawei handset biz Honor to be placed the Entity List
As for what it will do with the money, Samsung said it will solidify its memory advantage by investing in next-gen products. For its chips business, it will expand into new applications like AI and data centers.
"For memory, we will continue focusing on R&D and infrastructure investment for mid to long-term demand rather than short-term market changes, and we will actively implement existing investment plans early for system semiconductors," said Samsung, originally in Korean.
The tech giant also referred to its aggressive semiconductor investment as a "survival strategy" as once it loses competitiveness in the market, its almost impossible to recover.
[14]
Some of Samsung's less dominating business segments will benefit from the boost too. Its pharmaceutical business affiliates Samsung BioLogics Co and Samsung Bioepis Co will get two new factories and expand into contract development and manufacturing for vaccines and gene therapy. Samsung's next-gen communication network business will have its software capabilities and workforces reinforced.
Funds will also go into research and development for future tech like artificial intelligence, robots and super computers. The investment plan is larger than the company's 2018 three-year pledge by ₩60 trillion ($51bn).
The announcement comes less than two weeks after Samsung boss Lee Jae-yong was [15]granted parole from bribery, concealment of criminal proceeds, and embezzlement charges. ®
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[5] https://www.theregister.com/2021/08/20/global_semiconductor_sales/
[6] https://www.theregister.com/2021/07/29/samsung_q2_2021/
[7] https://www.theregister.com/2021/04/23/intel_q1_2021_data_center_doldrums/
[8] https://www.theregister.com/2021/07/12/intel_eu_chip_fabs/
[9] https://www.theregister.com/2021/08/24/intel_qualcomm_ramp_c/
[10] https://www.theregister.com/2021/08/20/google_project_hug/
[11] https://www.theregister.com/2021/08/11/samsung_fold_3_flip_3/
[12] https://www.theregister.com/2021/08/20/global_semiconductor_sales/
[13] https://www.theregister.com/2021/08/11/honor_entity_list_letter/
[14] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/storage&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44YSUXtZ4u-tpNtzOyZnfDsAAAAAQ&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[15] https://www.theregister.com/2021/08/10/samsung_boss_lee_jae_yong_paroled/
[16] https://whitepapers.theregister.com/
Samsung [1]said this spending spree will help the company "lead" society through the economic and societal challenges of the impending post-COVID industrial, international order and societal structure revolutions.
"The next three years are expected to be a period of reorganization of a new future order," said an English translation of Samsung's canned statement.
[2]
A large part of the investment will go towards hiring youngsters. Three-quarters of the cash will go to employing 40,000 people in South Korea between from now until 2023, the firm said. Samsung's plan is to increase direct employment, provide "educational opportunities", and support startups to capitalize on the innovation of the younger generation.
[3]
[4]
Some of the strategic business focuses are no surprise. Samsung recently overtook Intel to become the world's largest semiconductor supplier in terms of [5]sales for Q2 2021 . The chaebol's [6]memory sales are also dominating the marketplace. In no way does Samsung want to let these footholds go and it needs to keep up with investments by the likes of TSMC, which recently committed $100bn over three years to expand capacity, and Intel, which spent [7]$20bn to expand chipmaking in the US and another [8]$20bn on foundry operations in Europe , although not without a bit of financial help from governments.
[9]Intel, Qualcomm win deal to design 7nm silicon for US defense agencies
[10]Epic lawsuit's latest claims: Google slipped tons of cash to game devs, Android makers to cement Play store dominance
[11]Samsung's foldables fall to more realistic prices and harden up
[12]Samsung sprints past Intel to become world's semiconductor sales leader
[13]GOP lawmakers ask for former Huawei handset biz Honor to be placed the Entity List
As for what it will do with the money, Samsung said it will solidify its memory advantage by investing in next-gen products. For its chips business, it will expand into new applications like AI and data centers.
"For memory, we will continue focusing on R&D and infrastructure investment for mid to long-term demand rather than short-term market changes, and we will actively implement existing investment plans early for system semiconductors," said Samsung, originally in Korean.
The tech giant also referred to its aggressive semiconductor investment as a "survival strategy" as once it loses competitiveness in the market, its almost impossible to recover.
[14]
Some of Samsung's less dominating business segments will benefit from the boost too. Its pharmaceutical business affiliates Samsung BioLogics Co and Samsung Bioepis Co will get two new factories and expand into contract development and manufacturing for vaccines and gene therapy. Samsung's next-gen communication network business will have its software capabilities and workforces reinforced.
Funds will also go into research and development for future tech like artificial intelligence, robots and super computers. The investment plan is larger than the company's 2018 three-year pledge by ₩60 trillion ($51bn).
The announcement comes less than two weeks after Samsung boss Lee Jae-yong was [15]granted parole from bribery, concealment of criminal proceeds, and embezzlement charges. ®
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[2] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/storage&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2YSUXtZ4u-tpNtzOyZnfDsAAAAAQ&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
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[5] https://www.theregister.com/2021/08/20/global_semiconductor_sales/
[6] https://www.theregister.com/2021/07/29/samsung_q2_2021/
[7] https://www.theregister.com/2021/04/23/intel_q1_2021_data_center_doldrums/
[8] https://www.theregister.com/2021/07/12/intel_eu_chip_fabs/
[9] https://www.theregister.com/2021/08/24/intel_qualcomm_ramp_c/
[10] https://www.theregister.com/2021/08/20/google_project_hug/
[11] https://www.theregister.com/2021/08/11/samsung_fold_3_flip_3/
[12] https://www.theregister.com/2021/08/20/global_semiconductor_sales/
[13] https://www.theregister.com/2021/08/11/honor_entity_list_letter/
[14] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/storage&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44YSUXtZ4u-tpNtzOyZnfDsAAAAAQ&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[15] https://www.theregister.com/2021/08/10/samsung_boss_lee_jae_yong_paroled/
[16] https://whitepapers.theregister.com/
"a period of reorganization of a new future order"
And we fully intend to be at the top of that order.
Hey, that's capitalism for you.