South Korean information technology companies - mainly Samsung Electronics Co., SK Hynix Inc. and LG Electronics Inc. - increased their spending on research and development last year with their R&D investment against sales higher than that of U.S. multinational tech giant Apple Inc.
According to a study by Maeil Business Newspaper Wednesday on business reports of 17 companies whose market capitalization is more than 10 trillion won ($8.8 billion), they invested a total of 28.54 trillion won in R&D last year, up 2 percent from 27.97 trillion won in 2015.
Samsung Electronics took the lion’s share by spending 14.79 trillion won on R&D for semiconductor, home appliance and smartphone businesses in 2016, according to the company’s regulatory filing. The figure accounted for 7.3 percent of its last year’s sales of 201.87 trillion won, higher than Apple’s R&D spending of 4.4 percent against its sales from October 2015 to June 2016.
The country’s second largest chip maker SK Hynix’ R&D investment against sales reached 12.2 percent last year, the highest among the 17 firms. Its R&D spending exceeded 2 trillion won for the first time last year, about 64 percent of its operating profit of 3.27 trillion won.
LG Electronics also raised its investment in R&D to 7 percent of its sales, spending 3.88 trillion won last year, up 69.4 billion won from a year earlier. It has set a goal to increase its spending on the development of technologies related to the so-called fourth industrial revolution like the Internet of Things and big data this year.
LG Display Co. spent 4.3 percent of its sales on R&D, but the actual amount of investment decreased by 7 percent from 2015.
On the other hand, Samsung SDS Co. cut the R&D investment by 9 percent, and Posco by 9.5 percent following its business streamlining. Hyundai Heavy Industries spent 21.3 percent less on R&D in 2016 from the previous year, hit by the protracted slowdown in the shipbuilding and shipping industries.
The country’s second largest car maker Kia Motors Corp. spent 3.1 percent of its sales on R&D last year, more than its bigger sister company Hyundai Motor Co. with 2.5 percent. In the cosmetic industry, AmorePacific Corp. showed greater R&D investment of 1.7 percent than LG Household & Healthcare Co. with 0.4 percent. In the chemical industry, LG Chem Ltd. spent 3.3 percent of its sales, higher than its rival Lotte Chemical Co. with 0.5 percent.
By Moon Il-ho
[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]