CEO Score Investigates 3-Year R&D Expenses of 231 Out of Top 500 Domestic Companies
Samsung Electronics Leads with 24.9 Trillion KRW, Netmarble Tops R&D Investment Relative to Sales
Amid a 27% or more decline in net profit due to the economic slowdown last year, the top 500 domestic companies increased their research and development (R&D) investment by 14% (8.4042 trillion KRW) compared to the previous year.
Samsung Electronics ranked first overall by investing 24.9292 trillion KRW in R&D last year. Samsung SDI and Kakao joined the '1 trillion KRW club' for R&D investment for the first time last year. Investments were concentrated in the information technology (IT) and artificial intelligence (AI) sectors.
On the 26th, CEO Score, a corporate data research institute, compared the R&D investment amounts of 231 companies (excluding financial firms) that disclosed R&D activities in their business reports from 2020 to 2022. It was found that last year's R&D investment amounted to 68.4115 trillion KRW, an increase of 14% (8.4042 trillion KRW) from the previous year.
On the other hand, operating profit was 123.6785 trillion KRW, down 25.4% (42.1066 trillion KRW) from the previous year, and net profit was 106.1575 trillion KRW, a decrease of 27.1% (39.3782 trillion KRW). Despite the 'lean season' with a sharp decline in performance due to the global economic slowdown and export decrease, companies increased their future investments.
Among the 231 companies, 173 (74.9%) increased their R&D investment last year, while 58 (25.1%) decreased it. The top 10 companies in R&D investment were Samsung Electronics, SK Hynix, LG Electronics, Hyundai Motor Company, LG Display, Kia, Naver, LG Chem, Hyundai Mobis, and Samsung SDI. They spent 47.8447 trillion KRW on R&D last year, accounting for about 70% of the total investment of the 231 surveyed companies. All 10 companies have been in the R&D investment 'Top 10' for three consecutive years.
In particular, Samsung Electronics invested 24.9292 trillion KRW in R&D last year, accounting for 36.4% of the total investment of the 231 companies. Despite a 16% decrease in operating profit compared to the previous year due to the global economic slowdown and the semiconductor cycle entering a downturn phase, Samsung Electronics increased its R&D investment by 10.3%. SK Hynix also increased its R&D investment by 21.3% from the previous year to 4.9053 trillion KRW. LG Electronics invested 4.037 trillion KRW (12%↑), Hyundai Motor Company 3.3406 trillion KRW (7.8%↑), LG Display 2.4316 trillion KRW (14.3%↑), Kia 2.163 trillion KRW (15.6%↑), and Naver 1.8091 trillion KRW (9.3%↑) followed.
Companies with high R&D investment relative to sales last year included Netmarble (32.1%), Naver (22%), Krafton (21.8%), NCSoft (18.4%), and Celltrion (18.1%). Many of these companies are in high-growth sectors such as services, gaming, pharmaceuticals, and bio. Naver and Netmarble have maintained an R&D investment ratio exceeding 20% of sales for three consecutive years. Netmarble increased its R&D investment by more than 50%, investing one-third of its sales in R&D. Kakao joined the 1 trillion KRW club by investing 1.0213 trillion KRW in R&D last year, a 33.6% increase from 764.5 billion KRW in 2021.
By industry, R&D investment was highest in IT and electrical electronics (40.8008 trillion KRW), followed by automobiles and parts (8.9542 trillion KRW), services (5.3145 trillion KRW), petrochemicals (3.8285 trillion KRW), and shipbuilding, machinery, and equipment (2.5542 trillion KRW).
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