Investment by South Korea's major conglomerates plunged 23 percent on-year in the first half of the year due mainly to flagging chip and display businesses, a corporate tracker said Wednesday.
Investment by 353 subsidiaries of 59 business groups totaled 36.9 trillion won (US$30.4 billion) in the January-June period, compared with 47.9 trillion won a year earlier, CEO Score said in a report based on their half-year reports.The companies cut their spending on equipment and other tangible assets by 26.1 percent while jacking up investment in intangible assets by 13 percent.
Overall investment plunged in the first half as Samsung, SK and LG groups sharply curtailed their spending amid sluggish semiconductor and display sectors. Also cited was the global economy's sluggishness.
Samsung, the parent of global memory chip leader Samsung Electronics Co., saw its first-half investment nose-dive 40.2 percent on-year to 9.3 trillion won.
Investment by SK, which has chip giant SK hynix Inc. under its wing, sank 21.2 percent. LG, which owns display behemoth LG Display Co., also trimmed its investment by 28.4 percent.
The three conglomerates accounted for 96 percent of the decreased amount of investment by all the business groups, according to the report.
By company, Samsung Electronics chalked up a 42.3 percent drop; SK hynix, 31.6 percent; and LG Display, 55.6 percent.
In contrast, South Korea's three mobile carriers sharply increased their investment during the period as they launched full-fledged 5G services.
No. 2 mobile carrier KT Corp. invested 1.5 trillion won in the first half, up 33.2 percent, or 380 billion won, from a year earlier. It marked the largest increase amount among all companies. Industry leader SK Telecom Co. saw its first-half investment jump 23.6 percent, with LG Uplus Corp. posting a 54.6 percent surge. (Yonhap)