Last Year, Samsung and SK Semiconductor Facility Investments Totaled 67 Trillion Won... Exceeding Half of the Big 4 Groups' Investment Amounts

Since President Yoon Suk-yeol emphasized private-led economic growth after his inauguration in May last year, it has been confirmed that the total scale of facility and equipment investments made by the four major groups?Samsung, SK, Hyundai Motor, and LG?exceeded 120 trillion won last year. As major affiliates within these groups have allocated more funds for investments this year compared to last year, the scale of investments by the four major groups is expected to increase despite the challenging business environment this year.

According to the 2022 business reports submitted on the 23rd by major affiliates of the four major groups to the Financial Supervisory Service, Samsung allocated more than 60 trillion won to facility investments last year. These investments were mainly focused on future growth sectors such as semiconductors, batteries, and bio. Samsung Electronics was the largest investor. Samsung Electronics carried out facility investments worth 53.1 trillion won, centered on expanding and converting advanced processes in the DS (semiconductor) and SDC (display) divisions and infrastructure investments. The DS division received the largest investment of 47.8717 trillion won, while the SDC and other divisions invested 2.4958 trillion won and 2.7478 trillion won, respectively.

Other affiliates also executed investments mostly in the trillion-won range. Samsung SDI used 2.6288 trillion won last year for investments aimed at increasing production capacity. The investment amounts by division were 2.5949 trillion won for Energy Solutions and 33.9 billion won for the Electronic Materials division. Samsung Biologics invested 1.214 trillion won in the contract development and manufacturing organization (CDMO) facilities for biopharmaceuticals, and Samsung C&T made investments worth 1.099 trillion won. Samsung Electro-Mechanics also used 1.4912 trillion won last year to expand production capacity.

Samsung Electronics recently announced plans to invest 300 trillion won over the next 20 years in the Yongin semiconductor cluster in line with the government's advanced industry promotion strategy. Separately, all Samsung affiliates declared an investment of 60 trillion won over 10 years for regional balanced development. As such, the group's overall facility investment scale is likely to increase this year compared to last year. Samsung SDI is also planning facility investments across all business divisions this year, focusing on the battery business. Samsung Biologics recently finalized plans to build its 5th plant, with an investment of 1.98 trillion won. Samsung Biologics envisions expanding production facilities up to the 8th plant in the long term, with an estimated investment of about 7 trillion won for the construction of plants 5 through 8.

Among LG's affiliates, which invested about 22 trillion won, LG Energy Solution was the most active investor. LG Energy Solution spent a total of 6.3 trillion won last year on new and expanded secondary battery production and quality enhancement. LG Display executed facility investments worth 5.2 trillion won, LG Electronics invested 4.1682 trillion won, and LG Chem invested 2.5512 trillion won. LG Uplus also invested 2.4204 trillion won in future business foundations such as 5G, artificial intelligence (AI), and the Internet of Things (IoT). LG announced last year that it plans to invest 106 trillion won domestically from 2022 to 2026. In particular, from this year through 2027, it plans to invest 44 trillion won in future automobile-related industries such as batteries and automotive electronics, and next-generation display technologies, and about 10 trillion won in AI, software, bio and healthcare, and cleantech sectors.

Among Hyundai Motor Group, which invested about 12 trillion won last year, Hyundai Motor made the largest investment of 8.4897 trillion won. This is about 10% more than the 7.537 trillion won invested last year. This year, Hyundai Motor plans to invest 10.5267 trillion won, more than last year.

Kia invested 1.3362 trillion won last year in new product development and new and expanded factories. This year, it plans to invest 2.3599 trillion won. Hyundai Mobis spent 1.0476 trillion won on facility investments last year and has allocated 2.6406 trillion won for this year. Hyundai Steel also invested 1.0819 trillion won last year. Hyundai Motor Group plans to invest 63.1 trillion won in Korea from 2022 to 2025 for electrification transition and new technology development.

Hyundai Motor, Kia, Hyundai Mobis, and others will invest 16.2 trillion won in electrification and eco-friendly sectors, and 8.9 trillion won in future new technology development and new business promotion such as robotics, advanced air mobility (AAM), connectivity, autonomous driving, mobility services, and artificial intelligence (AI). Additionally, 38 trillion won will be invested in product differentiation such as new car development and smart factory facilities.

In SK Group, SK Hynix made facility investments worth 19.65 trillion won last year to expand production capacity. This is about a 47% increase compared to the 13.364 trillion won invested in 2021. SK Innovation also invested 14.9512 trillion won in battery facility investments and expansions from 2018 through last year. Considering that the cumulative investment amount until 2021 was 7.4726 trillion won, SK Innovation allocated more than 7 trillion won for facility investments in 2022 alone.

SK Group plans to make large-scale investments totaling 247 trillion won in the so-called 'BBC' sectors?semiconductors (C), batteries (B), and bio (B)?from 2022 to 2026. About 72% (179 trillion won) of the total investment will be made domestically. In particular, more than half of the total investment, 142.2 trillion won, will be allocated to semiconductors.

This content was produced with the assistance of AI translation services.