Samsung to fork out billions for semiconductors and biotech
- Samsung aims to to create 80,000 jobs through 2026, mostly in semiconductors and biopharmaceuticals.
- The allocated expenditure is a 30% hike mainly to create jobs, boost technology in the next five years.
- The tech giant said that 80% of investments will be made in South Korea.
- The investment would also bring forward the mass production of chips based on the 3-nanometer process, Samsung said.
Over the last five years until 2021, South Korean conglomerate the Samsung Group has already invested 330 trillion won in its business development. Now, for the next five years, the group has pledged to spend 30% more or 450 trillion won (US$356 billion) to shore up businesses in semiconductors, biopharmaceutical and other next-generation technologies.
The new investment that outlines to ready “Samsung’s future for dynamic innovation growth”, indicated that the bulk of the expenditure would go to enhancing the chipmaker’s system memory and foundry capacity. To put it simply, the tech giant will spend 360 trillion won at home to create 80,000 jobs, a sharp increase from last year’s pledge of 240 trillion won for the following three years of which 180 was devoted to shore up 40,000 jobs in South Korea.
The conglomerate — whose units from Samsung Electronics Co. to Samsung Biologics Co. dominate Korea’s economy — predicts the next five years to be “the inflection point” for the Korean economy, therefore it will execute bold investment to contribute to “the economy’s new leap” and add vitality to the society, according to its press statement.
“For the next five years, Samsung plans to focus on intensive investment in future food and new growth IT, creating jobs, nurturing an industrial ecosystem in which large and small businesses grow together. Fabless system semiconductor, foundry, and bio are future food industries that are expected to grow rapidly in the post-corona era,” the company’s statement reads.
Samsung basically expects its investments through 2026 to boost its strategic areas such as the chip sector, while pledging aggressive investments in the biopharmaceutical sector to make it as successful as its semiconductors business. That said, securing domestic chip and bio supply chains will have strategic significance and be important for South Korea’s economic security, Samsung added.
Semiconductors, biotech — the main focus for Samsung in the next five years
At this point, the vast majority of the world’s most advanced microchips are made by just two companies — Samsung and Taiwan’s TSMC — both of which are running at full capacity to alleviate a global shortage. But we have come to a point where many major industrial powers such as the US, Europe, China and Japan are scrambling to strengthen their offerings locally in semiconductors to diversify supplies.
Samsung Electronics, as of third quarter 2021, made up 43.9% of the global DRAM shipments. Therefore, on the memory front, Samsung said it will preemptively apply EUV technology to ensure its lead against growing challenges from US and Chinese players. Then there are system chips where Samsung Electronics has been lagging despite a fast expanding market.
The group plans to invest in that segment to enhance competitiveness in high-performance and power-saving application processors and 5G/6G power chips. As for high-definition image sensors, where Samsung is behind an estimated market share of 24.9%, it hopes to narrow the gap with top commanding market share of more than 40%.
“If Samsung widens the memory gap and reverses the fabless system semiconductor and foundry, it can leap into a unique company that leads all three semiconductor fields. Reinforcement of ‘supergap’ leadership through preemptive application of memory and cutting-edge technology,” Samsung said.
To put it simply, Samsung has decided to strengthen its “super-gap status” by continuously investing in the memory field, which it has been leading for 30 years, for the next five years. In terms of the foundry business, Samsung plans to develop and apply differentiated next-generation production technology that did not exist before to mass-produce 3nm or less products early.
“By securing next-generation package technology, Samsung has decided to develop a convergence solution equipped with a computing chip and memory to lay the foundation for a leap forward in the industry,” it added. To recall, Samsung Electronics showed off a prototype of the world’s first chip from 3-nano processing to the US President Joe Biden last Friday and said it is mass producing the chips within the first half of this year.
Separately, Samsung plans to build its fifth factory for Samsung BioLogics after completing the fourth plant to cement its leadership in consigned drug manufacturing. “In order to secure ‘bio sovereignty’, Samsung has decided to continue its aggressive investment stance and to discover new growth engines by expanding its biosimilar pipeline,” it added.
Not missing out on the next-gen tech, artificial intelligence and 6G would too be the center of investment for the company in the next five years. Currently, Samsung is conducting research on advanced technologies through global AI centers in seven regions around the world, while recruiting and nurturing experts.