Vertical Divider
Lee Jae-yong Released on Friday, Faces Tough Issues
Samsung Electronics' de facto leader Lee Jae-yong was paroled on Friday. While the tycoon faces some restrictions such as on regaining his title as vice chairman, a presidential pardon for Lee could eliminate the restrictions. Regardless of the conditions, Lee should be able to address pending tasks, given that Samsung's market capitalization accounts for 30% of Korea's market cap, and the conglomerate pays 20% percent of the total corporate tax collected and employs 300,000 local workers.
The Samsung chief is likely to focus on four tasks
Samsung Biologics, a drug-manufacturing affiliate of the group, has begun manufacturing Moderna's vaccines at its plant here starting from the third quarter, calls from political circles are growing that Lee should play an "influential" role in ensuring that vaccines produced here could be distributed to the Korean people.
Samsung Electronics remained mum over its record cash hoard of 209 trillion ($181.9 billion), but now the company is "very near" to making key decisions regarding investments for semiconductor manufacturing facilities in the U.S. and heightening its business competitiveness by acquiring companies in new growth sectors, possibly in artificial intelligence, 5G or auto parts. Pending investment decisions include an upgraded blueprint for the memory business that would give the business an edge over its competitors. Samsung's EV battery manufacturing unit also faces a major decision on whether to invest in the U.S. at a time when its competitors are building manufacturing plants there and have joined hands with U.S.-based carmakers to secure long-term clients.
As we discussed last week, Samsung's smartphone business, which accounts for the largest portion of the conglomerate's earnings. It still reigns as the world's No. 1 overall smartphone vendor, but the market has reached maturity, and uncertainty prevails as Chinese players step up their game and raise a strong challenge to Korea's most recognizable brand. Samsung's smartphone strategy is to popularize premium models, centering on foldable phones. But the prices are projected to still fall in the lower- to mid-$1,000 range, which limits volume as the Chinese OEMs and Apple have been pumping up the volume.
Samsung faces increased competition in the foundry business from Taiwan's TSMC, which is pouring $128 billion into facility investments through 2024 and Intel which plans to invest $20 billion into setting up two foundries in Arizona, while pursuing acquisitions of existing foundry businesses. Samsung has yet to reach an official decision on where to build an additional foundry plant in the U.S., into which it would invest 19 trillion won. According to Samsung sources, the U.S. state of Texas is the leading choice for the site for expansion of its new foundry line.
Samsung Electronics' de facto leader Lee Jae-yong was paroled on Friday. While the tycoon faces some restrictions such as on regaining his title as vice chairman, a presidential pardon for Lee could eliminate the restrictions. Regardless of the conditions, Lee should be able to address pending tasks, given that Samsung's market capitalization accounts for 30% of Korea's market cap, and the conglomerate pays 20% percent of the total corporate tax collected and employs 300,000 local workers.
The Samsung chief is likely to focus on four tasks
- addressing the Moderna COVID-19 vaccine supply shortage Korea is currently suffering,
- carrying out investments to strengthen Samsung Group's future competitiveness,
- implementing a new strategy for its sluggish smartphone business
Samsung Biologics, a drug-manufacturing affiliate of the group, has begun manufacturing Moderna's vaccines at its plant here starting from the third quarter, calls from political circles are growing that Lee should play an "influential" role in ensuring that vaccines produced here could be distributed to the Korean people.
Samsung Electronics remained mum over its record cash hoard of 209 trillion ($181.9 billion), but now the company is "very near" to making key decisions regarding investments for semiconductor manufacturing facilities in the U.S. and heightening its business competitiveness by acquiring companies in new growth sectors, possibly in artificial intelligence, 5G or auto parts. Pending investment decisions include an upgraded blueprint for the memory business that would give the business an edge over its competitors. Samsung's EV battery manufacturing unit also faces a major decision on whether to invest in the U.S. at a time when its competitors are building manufacturing plants there and have joined hands with U.S.-based carmakers to secure long-term clients.
As we discussed last week, Samsung's smartphone business, which accounts for the largest portion of the conglomerate's earnings. It still reigns as the world's No. 1 overall smartphone vendor, but the market has reached maturity, and uncertainty prevails as Chinese players step up their game and raise a strong challenge to Korea's most recognizable brand. Samsung's smartphone strategy is to popularize premium models, centering on foldable phones. But the prices are projected to still fall in the lower- to mid-$1,000 range, which limits volume as the Chinese OEMs and Apple have been pumping up the volume.
Samsung faces increased competition in the foundry business from Taiwan's TSMC, which is pouring $128 billion into facility investments through 2024 and Intel which plans to invest $20 billion into setting up two foundries in Arizona, while pursuing acquisitions of existing foundry businesses. Samsung has yet to reach an official decision on where to build an additional foundry plant in the U.S., into which it would invest 19 trillion won. According to Samsung sources, the U.S. state of Texas is the leading choice for the site for expansion of its new foundry line.
|
Contact Us
|
Barry Young
|