Samsung to invest, hire record amounts in 2012

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Samsung to invest, hire record amounts in 2012

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Samsung Group, Korea’s largest business conglomerate, announced yesterday it will invest 47.8 trillion won ($41.7 billion) this year despite economic uncertainties at home and abroad.

The amount is a record in the group’s 73-year history and an increase of 12 percent from last year, which was the previous record.

The company also said it will add 26,000 new workers this year, which is also a record and up 4 percent from last year.

“Samsung has decided to carry out an all-time high amount of investment and hiring this year despite the recession in the global economy and uncertainties in the business environment because it wants to secure future growth engines and contribute to the advancement of the nation’s economy,” Samsung said in a press release.

Future chip and panel

Samsung’s investment represents one-third of the 151 trillion won investment Korea’s top-30 companies have planned for this year.

Samsung, which has over 80 affiliates in areas such as electronics, engineering, finance, textiles and hospitality, did not break down the investment by affiliates.

Samsung said it has earmarked the most money - 31 trillion won - for facilities investment, followed by 13.6 trillion won for research and development and 3.2 trillion won for capital investment, which include mergers and acquisitions.

Samsung also failed to break down its facilities investment by business areas, but sources say it’s highly likely that the most money will be poured into the semiconductor business, one of the company’s cash cows. The company is estimated to have invested more than 10 trillion won in the area last year.

Samsung Electronics, the group’s flagship company, is the world’s No. 1 maker of memory chips like DRAM (dynamic random-access memory) and NAND flash chips, but is only the world’s ninth manufacturer of nonmemory chips, or system-on-chips.

The company has been attempting to beef up the latter business for the past several months. System-on-chips (also called logic chips) control entire computing systems, whereas memory chips store or read data. System-on-chips are more profitable than conventional memory chips and less vulnerable to price fluctuations.

Analysts believe Samsung has also set aside hefty sums for organic light-emitting diode displays. OLED panels are thinner, lighter and clearer than liquid-crystal display (LCD) panels. Because of their high prices, they were generally used in the past for small devices like smartphones and tablet computers.

But increasingly, this panel is being adopted for larger products like televisions. Samsung and LG Electronics both unveiled 55-inch OLED TVs at the Consumer Electronics Show in Las Vegas earlier this month, with plans to release them in the market in coming months.

“Chances are high that Samsung will focus its investment in OLED and nonmemory semiconductors this year, which are two of its new growth engine areas,” said Lim Dol-i, an analyst at Solomon Investment & Securities.

Samsung drastically increased its investment in OLED to 5.4 trillion won last year from just 1.4 trillion won in 2010.

Youth employment

Looking in details at Samsung’s employment plans, the company plans to add 9,000 new workers who are university graduates and 5,000 new employees who are experienced professionals. The two figures are the same as last year.

The company, however, plans to hire 12,000 new workers in technical posts, which refers to employees with just high school diplomas or vocational college degrees, which is an increase of 1,000.

Such plans are Samsung’s way of trying to help with the growing problem of youth unemployment in the country.

“It is Samsung’s responsibility and duty to improve the national economy and provide a stronghold for sustainable development,” Samsung Electronics Chairman Lee Kun-hee said in his New Year’s speech on Jan. 2. “We will try to give many offerings so that young people can have hope.”

The unemployment rate for people between the ages of 15 and 29 hit 7.7 percent in December, the highest in eight months, according to the Statistics Korea.

Meanwhile, Samsung Electronics, the world’s largest maker of LCD panels, also announced yesterday that it will start the mass production of 46-inch transparent LCD panels this month, which would be the industry’s first.

Last month, the company began the mass production of 22-inch transparent LCD panels. With this, Samsung is also the only one in the global technology industry with the capacity to mass produce two different sizes of these panels.

Samsung sees a lot of potential in transparent LCDs, which are expected to be used in places like subways, bus stations and billboards and become a major tool for advertising and marketing. The market for such displays is expected to be around 1 trillion won in 2015 but surge to 33 trillion won in 2020.

By Kim Hyung-eun [hkim@joongang.co.kr]

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