Korean mid-size companies’ R&D spending up 12.5% in 2022: CEO Score

Pearl Abyss Corp. headquarters [Courtesy of Pearl Abyss]

Research and development (R&D) spending by mid-size companies listed on the South Korean stock markets surged 12.5 percent last year from a year ago, although the entire amount was only one-fifth of that of tech giant Samsung Electronics Co.

According to business data tracker CEO Score on Wednesday, 571 out of the 710 mid-size companies that disclosed R&D figures saw spending grow 12.5 percent to 5.25 trillion won ($3.92 billion) last year, up from 4.67 trillion won a year ago.

The combined R&D spending of the 571 companies is equivalent to 21 percent of 24.9 trillion won of Samsung Electronics last year. The increase is 1.5 percentage points lower than 14 percent of the top 500 companies during the same period.

The figures show that the mid-size companies were relatively passive in R&D spending when compared with their larger peers due to the prolonged slowdown in the global economy.

The analysis showed that 62.9 percent of the surveyed companies, or 359 mid-size enterprises, increased R&D spending last year.

Game publisher Pearl Abyss Corp. invested the largest amount of 135.5 billion won in R&D, followed by Ildong Pharmaceutical Co. at 125.1 billion won, Com2uS Corp. at 124.8 billion won, Dong-A ST Co. at 109.6 billion won, Jusung Engineering Co. at 85.9 billion won, Eugene Technology Co. at 80 billion won, and Nepes Corp. at 74.1 billion won.

The number of listed mid-size companies with R&D spending of over 100 billion won jumped to four last year from two in 2021.

Com2uS saw the largest increase by 34 billion won. Analysts attributed the rise to the company’s strategy to expand investments in new businesses such as metaverse and media content.

Jusung Engineering saw the second-largest increase of 31.3 billion won, followed by Shin Poong Pharmaceutical Co. of 25.2 billion won and Wemade Co. of 23.3 billion won.

HUMAX Co., on the other hand, saw R&D spending retreat by 21.5 billion won last year from 31.5 billion won a year earlier. Sam Chun Dang Pharm Co. also saw a sharp decline in R&D spending by 8.3 billion won, Huneed Technologies Co. by 6.7 billion won, and SMAC Co. by 5.6 billion won.

ISU Abxis Co., a biotech company dedicated to novel drug development, had the largest ratio of R&D spending to sales. The company invested 19.1 billion won, or 46.4 percent of its sales, in R&D, followed by Telechips, Inc. (43.4 percent), SBB Tech Co. (42.5 percent), Pearl Abyss (35.1 percent), AhnLab Inc. (27.2 percent), and Shin Poong Pharmaceutical (26.5 percent).

By sector, IT electronics had the largest R&D spending at 1.88 trillion won, followed by pharmaceuticals and bio at 1.16 trillion won, services at 798.4 billion won, automobiles and parts at 484 billion won, and petrochemicals at 203.2 billion won.