A $22 billion bet on new tech — Samsung's next move

Samsung will put more than $22 billion toward tech like AI and 5G.                  Jung Yeon-je  AFP  Getty Images

Samsung will put more than $22 billion toward tech like AI and 5G. Jung Yeon-je AFP Getty Images

Samsung, hit hard by the financial crisis in the late 1990s, sold off its then five-year-old vehicle business to France's Renault Group back in 2000.

In particular, the South Korean group plans to invest in the development of artificial intelligence, mobile communications technology 5G, electronic components for automobiles and bio-pharmaceutical business.

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.

AI is set for a particularly high investment, with Samsung set to expand the number of researchers in its various research centres across the world to over 1,000.

The investments will be focused on artificial intelligence, 5G network technology, electric components for cars of the future, and biopharmaceuticals.

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The wave of cash will also beef up Samsung's biopharmaceutical wing, the company said.

Today's update comes after the company reported an operating profit of KRW14.87 trillion ($13.3 billion) for its second quarter, down 5% sequentially but up 6% year-on-year.

"The latest investment reflects the company's belief that it may fall behind the competition if it takes its current position as a global leader for granted and is lax is making investments now", an official from Samsung said.

In order to beef up the competitiveness of local small and medium-sized firms, Samsung said it will assist local firms with adopting smart factory production solutions under cooperation with the Ministry of SMEs and Startups.

Samsung made the announcement to help revitalize the South Korean economy and foster new growth engines, Xinhua reports. Samsung's target is to provide support for 300 external candidates and 200 internal projects in the next five years.

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