Lee Jae-yong Overcomes Imprisonment Crisis and Meets with Semiconductor Executives

Lee Jae-yong, Vice Chairman of Samsung Electronics / Photo by Mun Ho-nam munonam@

[Asia Economy Reporter Changhwan Lee] As concerns about the resurgence of the novel coronavirus infection (COVID-19) deepen and a sense of crisis spreads in the semiconductor market, Samsung Electronics Vice Chairman Lee Jae-yong is also moving urgently. Despite ongoing judicial risks such as prosecution investigations, the growing management crisis caused by the COVID-19 resurgence and the US-China trade dispute has led him to personally oversee key businesses such as semiconductors and review growth strategies.

According to Samsung Electronics on the 16th, Vice Chairman Lee checked the status of key businesses such as semiconductors and smartphones with executives again on the same day, following the previous day.

Earlier, on the 15th, Vice Chairman Lee held a relay meeting with semiconductor CEOs including Kim Ki-nam, Vice Chairman of Samsung Electronics DS (Device Solutions) Division, Jin Kyo-young, Head of Memory Business, Jung Eun-seung, Head of Foundry Business, and Kang In-yeop, Head of System LSI Business, to discuss the global market situation, the impact of trade disputes on the semiconductor market, and the development roadmap for advanced processes (5nm, Gate-All-Around).

The reason Vice Chairman Lee directly began reviewing the semiconductor business immediately after overcoming the risk of detention is that the global semiconductor market has been rapidly changing recently.

Despite the spread of COVID-19 in the first half of the year, Samsung Electronics’ semiconductor business showed solid performance. However, concerns about the market in the second half of the year are growing, as spot prices for semiconductors have recently plummeted.

According to market research firm DRAMeXchange, the spot price of DDR4 8-gigabit (Gb) DRAM products, mainly used in PCs, was $2.91 as of the previous day. The spot price of DDR4 8Gb DRAM peaked at $3.60 in early April and has been declining for over two months.

It is analyzed that signs of a recent resurgence of COVID-19 in major markets such as the United States and China are affecting semiconductor spot prices.

DRAMeXchange stated, "Despite efforts by DRAM suppliers to reduce inventory, the gap between fixed transaction prices and spot prices may continue to widen," adding, "If this trend continues, fixed transaction prices for DRAM may decline in the third quarter."

There is also concern about the decline in South Korea’s semiconductor market share. According to the Federation of Korean Industries, South Korea’s global semiconductor market share steadily rose from 14.0% in 2010 to 24.0% in 2018 but fell to 19.0% last year. During the same period, China’s market share increased significantly, threatening Korea’s semiconductor industry.

However, it is encouraging that the foundry (contract manufacturing) business, which Samsung is nurturing as one of its future growth engines, is showing an upward trend in market share.

According to market research firm TrendForce, Samsung Electronics’ global foundry market share in the second quarter of this year is expected to rise to 18.8%, up 2.9 percentage points from 15.9% in the first quarter. Meanwhile, the market share of the top player TSMC is expected to decline from 54.1% in the first quarter to 51.5% in the second quarter. Although the gap between the two companies’ market shares remains large, it is expected to narrow over time.

A semiconductor industry official said, "The foundry market is growing to a scale comparable to the memory semiconductor market, making it sufficient to become Samsung Electronics’ next-generation growth engine," adding, "Since Vice Chairman Lee personally oversees it whenever there is an opportunity, it seems to be yielding results."

This content was produced with the assistance of AI translation services.