SK and LG to Invest 350 Trillion Won Over the Next 5 Years
[Asia Economy Reporters Park Sun-mi and Oh Hyun-gil] SK and LG's investment and job creation plans for the next five years, announced on the 26th, reflect a commitment to focus on domestic investment rather than overseas, aiming to develop South Korea into a high value-added product manufacturing base and a core research and development hub. Additionally, there is a strategic intent to actively foster new growth industries such as semiconductors, batteries, battery materials, bio, artificial intelligence (AI), and data to lead the newly emerging markets.
According to business circles on the 26th, half of SK Group's investment funds will be concentrated on semiconductors. To strengthen the competitiveness of semiconductors, where Korea has clear advantages, SK plans to build a semiconductor ecosystem to simultaneously enhance national competitiveness and create jobs. SK Group views semiconductors as the core of the Fourth Industrial Revolution, including AI and digital transformation (DT), and has decided to invest more than half of its total investment scale of 247 trillion won, amounting to 142 trillion won, in semiconductors and semiconductor materials.
Investment targets include the establishment of the Yongin semiconductor cluster, expansion of semiconductor fabs, and the expansion of facilities related to materials, parts, and equipment such as specialty gases and wafers. An SK official stated, "Investments in semiconductor and materials sectors like the Yongin semiconductor cluster will contribute to regional economic revitalization and lead to investment and job creation by secondary and tertiary partner companies, thereby enhancing economic ripple effects and promoting coexistence between large and small-medium enterprises and local communities."
In the green energy sector, SK plans to use funds to expand production facilities for electric vehicle batteries and separators, establish renewable energy production facilities such as hydrogen, which SK recently focuses on, or invest in global companies to strengthen green energy technology and competitiveness. In the bio sector, follow-up research and development expenses for new epilepsy drugs and the first domestic COVID-19 vaccine development success story, as well as expansion of contract manufacturing organization (CMO) facilities, are planned. In the digital sector, investments will focus on wired and wireless communication networks and information and communication content development.
LG to Invest 106 Trillion Won Domestically by 2026
LG plans to invest a total of 106 trillion won domestically by 2026 for a sustainable future and directly hire 10,000 people annually, totaling 50,000 over five years. LG Chairman Koo Kwang-mo has finalized this mid-to-long-term plan and will begin a series of 'strategy briefing sessions' starting from the 30th, beginning with LG Electronics' HE Business Division, lasting about a month. Domestic investments will be allocated to research and development (R&D), expansion of cutting-edge high value-added production facilities, and infrastructure construction, with 48 trillion won of the investment focused on R&D.
Primarily, more than 10 trillion won will be invested over five years in the battery and battery materials sectors. To secure top-level AI and big data technologies and promote large-scale challenging R&D in the AI and data fields, 3.6 trillion won will also be invested. Additionally, over 1.5 trillion won will be invested in innovative new drug development in the bio sector. In the eco-friendly cleantech fields such as biodegradable plastics and renewable energy industrial materials, 1.8 trillion won will be invested over five years.
LG expects that by focusing investments on new advanced businesses, it can hire more than 3,000 people?over 10% of total recruitment?in R&D fields such as AI, software (SW), big data, eco-friendly materials, and batteries over the next three years. An LG official explained, "Future growth sectors such as batteries and battery materials, automotive electronics, next-generation displays, AI and data, bio, and eco-friendly cleantech will see strengthened preemptive investments from a long-term perspective of over 10 years to secure global leadership."
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