Conglomerates expand R&D spending on recovery hopes

South Korea's major conglomerates increased spending on research and development in the first half of this year on expectations of a global economic recovery, data showed Wednesday.

The combined amount of R&D investment made by 55 affiliates of South Korea's top 10 conglomerates increased 8.28 percent on-year to 30.12 trillion won ($29.64 billion) in the January-June period, according to the data reported in their regulatory filings.

Of the tallied firms, 31 companies expanded their spending on R&D, while the rest tightened their belts.

During the first half of last year, the country's top 10 conglomerates also increased their R&D spending by some 20 percent.

The on-year gain in their R&D spending came as signs of a recovery in the global economy later this year induced local companies to expand investments, market experts said.

The U.S. economy, the world's largest, is showing signs of a mild recovery, and the European Central Bank remains firm in boosting the eurozone economy, they said.

China, South Korea's largest trading partner, is also expected to see its economic slowdown ease to some degree, according to them.

"It is very positive for large firms to increase spending on research and development," said Kim Gap-rae, a researcher at Korea Capital Market Institute.

By group, Samsung Group, the country's top business group, increased its R&D spending by some 656 billion won in the first half of the year, the largest amount among groups, followed by Hyundai Motor Group with 179 billion won and LG Group with 125 billion won.

Samsung Electronics Co., the world's largest handset maker, increased its R&D spending by 678 billion won from a year earlier to reach 7.74 trillion won in the first half of the year, which marks a 9.62-percent jump from a year earlier.

Hyundai Motor Co., the country's top automaker, spent some 822 billion won on research and development in the first half, up some 16 percent from a year earlier.

In contrast, LG Electronics Inc., the country's No.2 handset maker, cut its R&D spending by 2.6 percent from a year earlier to reach 1.8 trillion won, the data showed.

Samsung Heavy Industries Co., a major shipbuilder, saw its R&D spending fall to 53.1 billion won in the first half of the year from 138 billion won a year earlier, they showed. (Yonhap)