According to Pulse by Maeil Business News Korea,

The combined capital expenditure by major Korean businesses in the first half of this year amounted to 82.81 trillion won ($70.46 billion) in the first six months, up 4.6 percent from a year ago and 12.6 percent from pre-pandemic levels two years ago, data showed on Friday. But the chunk of the increase came from two chip-making giants Samsung Electronics and SK hynix, while most of other companies backpedaled, showing a depressed business sentiment.

According to local business tracker CEO Score and Yonhap News on Friday, 332 out of top 500 companies whose half-year earnings report is available invested a combined 82.81 trillion won in the first six months, up by 3.65 trillion won or 4.6 percent from a year-ago period.

Spending in the IT, electrical and electronics sector was the most noticeable with a 23.5 percent jump on year to 37.8 trillion won amid a boom in the semiconductor market.

Samsung Electronics executed investments of 25.11 trillion won in the H1 period, up 26.7 percent from a year ago. This is the company’s largest half-year spending, which more than doubled from two years ago. The spending took up one third of the total investments by the entire 332 companies in the first half. Samsung Electronics was the only company whose H1 capex exceeded 10 trillion won. The company’s pure capex that excludes investments in intangible assets came to 23.31 trillion won, of which 90 percent or 20.93 trillion won went to semiconductor facilities and equipment.

SK hynix scaled up its investment 40.5 percent to 7.48 trillion won in the first half. About 6.95 trillion won was used for capex to expand its Icheon production lines and introduce new equipment.

Combined spending by the two chip makers claimed 40 percent of the total investments by 332 companies. Excluding the two, the corresponding figure for other companies fell 7.0 percent or 3.8 trillion won from the previous year.

Spending by the retail industry rose 345.7 billion won, pharmaceutical companies 256.6 billion won, food and beverage makers 224.6 billion won, and service sector 221.8 billion won.

Those who spent more than 100 billion won include CJ CheilJedang (345.7 billion won), Samsung C&T (170.2 billion won), KT (169.4 billion won), Samsung Biologics (169.3 billion won), Lotte Shopping (131.7 billion won), and NCSoft (121.4 billion won).

Companies in the petrochemical, automobile and auto parts sectors cut their spending by more than 1 trillion won. State-owned firms reduced capex by 459.3 billion won, shipbuilding/machinery/facility makers by 435.9 billion won, telecommunications sector by 401 billion won, and steel makers by 399.8 billion won.

Korea Electric Power Corporation (KEPCO) spent the largest 6.82 trillion won among the state-owned names, down 2.7 percent from a year ago. LG Chem’s investment fell 18.1 percent to total 2.61 trillion won. Hyundai Motor also cut is spending by 13.6 percent to 2.52 trillion won.



By Pulse

Copyrights Pulse by Maeil Business News Korea. All Rights Reserved.

Source: Pulse by Maeil Business News Korea (August 20, 2021)