Samsung, South Korea’s biggest conglomerate, plans to invest $161 billion to ramp up its ability to produce memory chips and other products vital to future growth, lending its support to President Moon Jae-in’s efforts to shore up a slowing economy.
The spending will boost research and expenditure in artificial intelligence, fifth-generation wireless networks, bio-pharmaceuticals, displays, semiconductors and other key programs over the next three years, according to Samsung Electronics Co., the group’s crown jewel. Almost three-quarters of that investment will be made at home, it said in a statement.
Samsung made the announcement days after its de-facto chief, Lee Jae-yong, met with finance minister Kim Dong-yeon, at a chip factory south of Seoul.
The company posted a record profit last year and continues to ride a global rally for semiconductors, lead the world in smartphone sales and supply screens for Apple Inc.’s iPhone X.
“Samsung’s brimming with cash right now,” said Kwon Sung-ryul, an analyst at DB Financial Investment in Seoul.
“There’s a political side to it, too, because the government is calling for creating jobs and funneling investment at home.”
The investment is a boon for Moon, whose public approval ratings have been dwindling. Consumption has slowed, unemployment is rising and investment has cooled since he came to power last year.
Samsung said it may hire 40,000 more people, while the investment itself could help create 700,000 new jobs in the country.
Samsung has a reputation for forging ahead with investment even when competitors brace for a slowdown, a strategy that’s helped it emerge as the world’s biggest chipmaker after surviving one crunch after another.
Samsung this year finished building the world’s largest smartphone factory in India even as its Chinese market share shrinks.
Vice Chairman Lee met with Moon at the Indian factory’s opening this year, his first meeting with the nation’s leader since Lee was released in February on a suspended jail sentence for a graft conviction.
Lee had gone through a year of lockup at a facility south of Seoul after being detained on charges of bribing a friend of Moon’s predecessor, Park Geun-hye.
Lee, who has led Samsung since his father fell ill in 2014, denies wrongdoing and has appealed the ruling.