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Samsung to plug $160bn into new technology in major growth push

10 August 2018

Samsung Group will invest 25 trillion won ($22 billion) in artificial intelligence, 5G mobile technology, electronic components for autos, and the biopharmaceutical business in pursuit of new growth areas, Samsung Electronics (005930.KS) said on Wednesday.

Samsung will provide software education programs to 10,000 jobseekers and lend support to around 500 startups.

The Korean tech giant also announced a set of initiatives aimed at building the ecosystem of innovative businesses for the digital economy.

With 130 trillion won of the combined 180 trillion won meant to be invested at home, Samsung said around 700,000 jobs will be created overall here following its move.

It plans to become a leader in the market for 5G chipsets while also ensuring it is in position to capture demand for new applications in autonomous cars, the Internet of Things (IoT) and robotics that will be enabled by next generation networks. "But Samsung can be more active in M&As to do better at AI or 5G, when Lee is fully back to his business", Greg Roh, an analyst at Hyundai Motor Securities, said.

Including the latest plan, spending by Samsung Electronics and its affiliates on research and development and capital expenditures over the next three years will amount to 180 trillion won ($161 billion), Samsung said. Lee was freed after almost a year in jail but former President Park Geun-hye and a close associate remain imprisoned for bribery and other charges.

Jay Lee, the vice chairman of Samsung Electronics, is appealing that conviction after being released from jail in February with a suspended sentence. The area accounted for 78.1 percent of the combined operating profit in the second quarter. Sales were down 4%, to KRW58.48 trillion ($52.2 billion), compared with the year-earlier period.

Samsung's share price has fallen about 8% in South Korea so far this year.

Samsung to plug $160bn into new technology in major growth push