Samsung 450 trillion, SK 247 trillion, Hyundai Motor 63 trillion, LG 106 trillion, Lotte 37 trillion
5 major groups' investment amount over the next 3-5 years totals 903 trillion KRW... Including Hanwha and Doosan, 945 trillion KRW
Major conglomerates' investment nears 1,000 trillion KRW... 1.6 times this year's national budget
Focus on domestic investment... Vital for nurturing future growth engines
President Yoon Suk-yeol is saluting the national flag with attendees at the 2022 Korea Small and Medium Business Conference held on the lawn square in front of the Yongsan Presidential Office building in Seoul on the 25th. Attending the event were the heads of the five major conglomerates: Koo Kwang-mo, Chairman of LG Group; Chey Tae-won, Chairman of SK Group; Lee Jae-yong, Vice Chairman of Samsung Electronics; Chung Eui-sun, Chairman of Hyundai Motor Group; and Shin Dong-bin, Chairman of Lotte Group. (Photo by Yonhap News)
[Asia Economy Reporters Sunmi Park and Hyungil Oh] On the 26th, SK and LG Groups finalized their investment plans for the next five years, revealing that the total investment scale of the five major groups including Samsung, Hyundai Motor, and Lotte amounts to 903 trillion KRW. The number of new hires announced by these groups alone exceeds 260,000, marking an unprecedented scale of investment.
Including Hanwha and Doosan, the total investment by major domestic groups reaches 945.6 trillion KRW, approaching an astronomical figure of 1,000 trillion KRW. This 1,000 trillion KRW is 1.6 times the annual budget of South Korea (607 trillion KRW) and more than half (52%) of the Gross Domestic Product (GDP, 1,911 trillion KRW).
This indicates that major conglomerates are all staking their survival on investments to nurture future growth industries ahead of time. It can also be seen as a response to the pro-business stance repeatedly emphasized since the Yoon Suk-yeol administration took office.
According to the business community on the 26th, SK Group announced investment plans focusing on core growth engines centered on the so-called BBC industries: semiconductors (Chip), batteries (Battery), and bio (Bio). Judging that semiconductors are the core of the 4th Industrial Revolution, including AI and digital transformation, SK allocated more than half of its total investment, 142 trillion KRW, to semiconductors and semiconductor materials.
Additionally, to achieve the group’s goal of reducing 200 million tons of carbon by 2030, which is 1% of the global carbon reduction target (21 billion tons), SK will invest 67 trillion KRW in eco-friendly future industries such as electric vehicle batteries and materials, hydrogen, wind power, and renewable energy. The group will also invest 25 trillion KRW in digital sectors and 12 trillion KRW in bio sectors. An SK Group official stated, "We focused on strengthening core growth engines by concentrating 90% of the total investment on BBC," adding, "The driving force behind growth engines is ultimately talent, so we plan to actively create jobs by hiring 50,000 people."
On the same day, LG Group also announced plans to invest 106 trillion KRW domestically over the next five years, focusing on future growth sectors. In particular, 48 trillion KRW will be concentrated on research and development (R&D). By sector, 43 trillion KRW will be spent on future growth areas. Nearly half of that, 21 trillion KRW, will be focused on R&D in batteries and battery materials, automotive electronics, next-generation displays, AI and data, bio, and eco-friendly clean tech.
LG plans to directly hire about 10,000 people annually until 2026. Over three years, more than 3,000 hires, accounting for over 10% of total recruitment, will be made in R&D fields such as AI, software, big data, eco-friendly materials, and batteries, centered on new advanced businesses.
Earlier on the 24th, Samsung, Hyundai Motor, and Lotte Group simultaneously announced their investment plans for the next 3 to 5 years. Samsung will invest 450 trillion KRW over the next five years in future growth engines and new IT sectors. This is an increase of 120 trillion KRW, or more than 30%, compared to the previous five-year investment of 330 trillion KRW.
Domestic investment will increase from 250 trillion KRW to 360 trillion KRW, a rise of 110 trillion KRW or more than 40%. Investment areas include future new businesses such as ▲semiconductors ▲bio ▲AI and 6G (next-generation communication).
Samsung plans to hire 80,000 new employees over the next five years. The company intends to expand hiring mainly in core businesses such as semiconductors and bio, which are foundational technologies of the 4th Industrial Revolution, contributing to the creation of good jobs. This large-scale investment is known to be driven by Vice Chairman Lee Jae-yong’s determination. He has emphasized that through more investment and better job creation, Samsung will inject dynamism into society and meet public expectations.
Hyundai Motor Group will invest 63 trillion KRW domestically by 2025 to strengthen electrification and eco-friendly initiatives, new technologies and businesses, and competitiveness in existing businesses. The group will focus on advancing electrification and eco-friendly businesses, which are key pillars of future growth. Hyundai Motor, Kia, and Mobis will invest a total of 16.2 trillion KRW in these areas. Through this investment, they plan to secure technological superiority across all electrification and eco-friendly sectors, including pure electric vehicles, hydrogen fuel cell vehicles, and plug-in hybrids.
To systematically promote future new technologies and businesses such as robotics, Advanced Air Mobility (AAM), connectivity, autonomous driving, mobility services, and artificial intelligence (AI), Hyundai will invest 8.9 trillion KRW. Additionally, 38 trillion KRW will be invested in existing areas such as advanced research, vehicle performance, and improving the product competitiveness and customer service of internal combustion engine vehicles.
On the 24th, Choi Tae-won, Chairman of the Korea Chamber of Commerce and Industry, is giving a lecture at the New Entrepreneurship Spirit Proclamation Ceremony held at the Korea Chamber of Commerce and Industry in Jung-gu, Seoul. Photo by Kim Hyun-min kimhyun81@
Lotte Group will concentrate a total of 37 trillion KRW over five years in core industries such as chemicals, food, and infrastructure, including new growth themes like Health & Wellness (HW), mobility, and sustainability. Preparing to enter the bio-pharmaceutical CDMO business in the HW sector, Lotte is planning to build a domestic factory worth about 1 trillion KRW following the acquisition of overseas plants. Lotte Chemical will invest more than 1.6 trillion KRW over five years in hydrogen and battery materials businesses. It will also invest 7.8 trillion KRW in facility investments and production expansions to strengthen competitiveness in high-value specialty businesses and general petrochemical businesses. The distribution sector will receive 8.1 trillion KRW in investment.
Hanwha Group and Doosan also finalized and announced their investment plans for the next five years on the 24th and 25th. Hanwha Group will invest a total of 37.6 trillion KRW, including 20 trillion KRW in domestic industries such as energy, carbon neutrality, defense, and aerospace, which are future industrial sectors. Notably, the 20 trillion KRW domestic investment matches the total amount Hanwha Group has invested domestically and internationally over the past five years. Doosan Group announced plans to invest 5 trillion KRW over the next five years in next-generation energy businesses such as small modular reactors (SMR), gas turbines, and hydrogen fuel cells, aiming to revitalize the domestic energy industry ecosystem including nuclear power.
The simultaneous large-scale investments by major corporations are interpreted as a proactive effort to support the Yoon Suk-yeol administration’s core economic policy of ‘private sector-led growth.’ A notable feature is the emphasis on domestic investment. Since the launch of the Yoon administration, a business-friendly environment has been created, and these expanded domestic employment and investments are seen as a response to that environment.
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