LG Group, South Korea's fourth-largest conglomerate, said Thursday it will spend 6.3 trillion won ($5.59 billion) on research and development (R&D) activities this year, up by 400 billion won, or some 7 percent from a year ago, focusing on enhancing its two core areas - the handset-making and chemical businesses.
It is the first time for LG, whose key business portfolio covers making electronic devices and chemical materials to offering telecommunication service, to invest more than 6 trillion won in R&D.
The group which has home appliance maker LG Electronics Inc. under its wing spent 4.8 trillion won in 2012, and moderately increased the amount to 5.4 trillion won the subsequent year and 5.9 trillion won in 2014.
Its two flagship tech subsidiaries -- LG Electronics and LG Display Co. -- will concentrate on boosting strength in mobile application processors and smart TV displays, the group said.
The R&D spending for the year will focus on the group's three mainstream businesses -- mobile, flat panels and batteries, according to the group.
LG Electronics sold 59.1 million handsets last year, up 24 percent from a year earlier, with its operating profit growing by more than four-fold in that period on the back of the success of its marquee smartphone G series.
LG Display, which counts Apple Inc. as one of its major clients, has shored up production of its flagship organic light-emitting diode (OLED), as well as the quantum dot-based panels known for high color reproduction, a move to vie with LG's bigger rival Samsung, which has been pushing its quantum dot TVs.
Samsung Group, the top conglomerate in South Korea, is expected to spend about 50 trillion won in its 2015 investment, a similar level to last year's. The group's crown jewel Samsung Electronics Co., whose capital expenditures account for 80 percent of the group's total spending, likely invested 15 trillion won for R&D work in 2014, according to analysts' predictions.
Samsung does not release exact figures for its investment.
LG also said it plans to ramp up efforts for its chemical and energy solution parts to further nurture them as its key growth engines.
LG Chem Co., the world's largest maker of car battery packs, has been chased closely by local rival Samsung SDI Co., which has been aggressively expanding its mid- to large-size battery business for hybrid vehicles.
"The investment will "serve to bolster advancing (its) technologies that provide the basis for differentiated services and customer values," the group said in a press release.
LG's telecom division, led by affiliate LG Uplus Inc., will invest in the next 5G network and Big Data processing, while continuing to build forte in the Internet-of-Things (IoT)-related platforms, according to the group.
LG has kicked off since last October building a massive R&D center in a city far west of Seoul, for which it plans to spend 4 trillion won by 2020, when it's due to be completed. (Yonhap)