Samsung-raises-investment-despite-virus-outbreak
Samsung Electronics sells its latest smartphones at its Seoul store. Photo by Jeong Byung-hyuk/UPI News Korea

Top Korean company repeates time-honored strategy

Samsung Electronics has channeled the most resources into research and development during the first three months of this year despite the new COVID-19 coronavirus outbreak.

The Seoul-based company disclosed Monday its detailed first-quarter financial results, which showed its research expenditures amounted to 5.36 trillion won ($4.37 billion), up 6.3 percent from a year ago.

It marks the most quarterly spending on research in the 51-year history of the world’s largest manufacturer of smartphones and memory chips.

Samsung saw its first-quarter total revenue increase 5.6 percent from a year before, thanks to robust demand for server and mobile components. Its operating profit also rose 3.4 percent year-on-year.

The tech giant expects COVID-19 would hit its earnings during the second quarter as the pandemic is likely to reduce demand for several of its core products.

Executive Vice President Ben Suh said during a recent earnings call that it is impossible to determine how big of an impact will have or how long it will affect the economy.

But analysts point out Samsung is not likely to substantially reduce its research spending as the outfit has aggressively invested in R&D and facilities during the economic downturn to remain ahead of the curve.

For example, Samsung made a big investment in its next-generation memory chips called solid-state drives in 2008 when its competitors slash spending amid the global financial crisis.

The investment helped Samsung chalk up huge profits in the 2010s when the demand for SSD surged thanks to the wide popularity of smartphones and portal music players.

 

UPI News Korea provides this article. _ ED.