Samsung Ends Leadership Vacancy...Restarting 'Super-Gap Management' in Semiconductors and Batteries

Vice Chairman Lee Reviews Semiconductor Mid-to-Long-Term Investment
Promotes M&A to Expand New Businesses
Strengthens Compliance Management and Labor-Management Cooperation
Likely to Emphasize Social Responsibility to Overcome Anti-Business Sentiment

[Asia Economy reporters Su-yeon Woo and Hyun-jin Jeong] The management clock of Samsung Group is expected to speed up following the parole of Samsung Electronics Vice Chairman Lee Jae-yong. Swift decision-making was the driving force behind the global Samsung we see today. However, during the 207 days that Lee was imprisoned, Samsung Group made no major decisions. Meanwhile, key competitors such as Taiwan's TSMC and the United States' Intel launched fierce offensives, raising concerns that Samsung might fall behind in the semiconductor dominance battle.

On the 9th, Minister of Justice Park Beom-gye explained in a briefing after the parole review committee, "Vice Chairman Lee Jae-yong was included in this parole considering the prolonged COVID-19 pandemic's impact on the national economy and the global economic environment," reflecting this background.

Samsung Breathes a Sigh of Relief, Begins Reviewing Investment Strategy

Samsung Group is largely relieved by the parole decision. Although Samsung Electronics has strengthened system management and achieved record-breaking performance even in the absence of its head, it is also true that the absence of the head has shown limitations in bold investments and mid-to-long-term strategic planning.

Therefore, Vice Chairman Lee is expected to start by reviewing mid-to-long-term investment strategies to respond to the rapidly changing semiconductor market conditions. To survive in the highly competitive foundry market, it is highly likely that Samsung Electronics will announce the selection of the site and investment for its foundry plant in the United States first. Additionally, the establishment of a concrete plan related to the 171 trillion won-scale system semiconductor investment will require the head's decisive decision.

Not only semiconductors but also the current status of investments in the battery industry must be reviewed. While competitors have established joint factories locally with U.S. automakers, Samsung SDI is also facing the necessity to enter the U.S. market through selecting joint venture partners. Alongside this, large-scale mergers and acquisitions (M&A) to secure new growth engines for the group are expected to be finalized through Vice Chairman Lee's decision. Previously, Samsung Electronics announced plans to pursue meaningful M&A within three years to expand new businesses such as artificial intelligence (AI), 5G, and automotive components.

Continuing Emphasis on Compliance Management and Labor-Management Cooperation

Vice Chairman Lee is expected to reaffirm his commitment to compliance management immediately after parole. When he was re-imprisoned at the end of January, his first message from prison was a statement supporting the continued activities of the Compliance Committee, thereby empowering the committee. Since the establishment of the Compliance Committee was emphasized not as a mere 'face-saving' measure for trials, this stance is expected to continue after the parole.

Especially as trials related to the Samsung C&T and Cheil Industries merger allegations continue even after parole, and Samsung's compliance management is under increased scrutiny, it is anticipated that comprehensive efforts to create a 'new Samsung,' as declared in the public statement, will be made. For this reason, some speculate that Vice Chairman Lee might appear at the Compliance Committee's regular meeting scheduled for the 17th.

At the same time, Vice Chairman Lee will face a new challenge of 'strengthening relations' with labor unions. On the 12th, the day before his parole, Samsung Electronics and four labor unions within Samsung Electronics jointly negotiated and established a collective agreement for the first time since the company's founding. This is the fruit of about a year since Vice Chairman Lee announced his intention to strengthen labor-management cooperation in May last year. Accordingly, attention is focused on whether Vice Chairman Lee will pursue meetings with labor unions after returning to the management field.

Strengthening Social Responsibility for ‘National Enterprise’ Samsung

For Samsung Group to truly become a ‘national enterprise,’ resolving anti-corporate sentiment through social responsibility is a top priority. The reason why about 70% of the public supported Vice Chairman Lee's parole or pardon is because they expect Samsung to fulfill social responsibilities from a national economic perspective.

Samsung Electronics continues various social contribution activities to support marginalized groups, such as providing approximately 50 billion won by next year to the ‘Samsung Hope Stepping Stone Center’ supporting youth independence, and is the only one among the top four conglomerates to maintain a college graduate recruitment system, paying attention to expanding youth employment. The Federation of Korean Industries emphasized, "This measure reflects the public's demand for Samsung to play a leading role in overcoming the economic crisis and achieving a leap forward. Therefore, we hope Samsung will actively engage in investment and job creation."

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