On the 29th Anniversary of the New Management Declaration, Lee Jae-yong Heads to Europe... Leading a Major M&A?

Visit to the Netherlands and Germany by the 18th
First destination ASML... Likely to oversee EUV equipment supply directly
Focus on large-scale M&A... NXP and Infineon mentioned
Possible announcement of a 'New Management Declaration' message

[Image source=Yonhap News]

Samsung Electronics Vice Chairman Lee Jae-yong embarked on a business trip to Europe on the 7th. This marks the resumption of his 'global management' activities six months after his visit to the Middle East in December last year, with the main purposes being to inspect local businesses and explore future growth opportunities. In particular, there are expectations that the outline of the ongoing large-scale mergers and acquisitions (M&A) will be revealed.

Coincidentally, this day marks the 29th anniversary of the late Chairman Lee Kun-hee's so-called 'New Management Declaration' in Frankfurt, Germany. The reason why the business community is focusing on Lee's trip to Europe on this commemorative day?when Samsung was elevated to the world's top tier with his famous admonition to "change everything except your wife and children"?is because of its symbolic significance.

According to the business community, Lee departed for Europe through the Gimpo Business Aviation Center on the morning of the same day. He is expected to visit the Netherlands, Germany, and other countries until the 18th.

Lee's first destination is likely to be the headquarters of ASML, a world-renowned semiconductor equipment company located in Eindhoven, the Netherlands. ASML is the sole producer of extreme ultraviolet (EUV) lithography equipment, which is essential for semiconductor fine processing.

For Samsung, a latecomer in the foundry (semiconductor contract manufacturing) market, securing EUV equipment is a critical task to narrow the gap with Taiwan's TSMC. The problem lies in supply not meeting demand. According to the securities industry, ASML's shipments this year are only 51 units. Of these, Samsung has secured 18 units, while TSMC has secured 22 units.

Moreover, as the United States, Japan, and others are also ramping up foundry investments, the behind-the-scenes competition to secure EUV equipment is expected to intensify. From Samsung's perspective, which recently declared its goal of becoming a 'semiconductor superpower,' it is necessary for Vice Chairman Lee to personally strengthen the cooperative relationship with ASML. A semiconductor industry insider said, "Even if you have the money, you cannot buy EUV equipment," adding, "As competition to secure EUV equipment intensifies, it is interpreted as a sign of the top management's willingness to personally resolve this issue."

[Image source=Yonhap News]

There are also expectations that Samsung's large-scale M&A will become more visible following Lee's European trip. The industry is cautiously speculating about Samsung's potential acquisition of automotive semiconductor companies. Samsung Electronics Vice Chairman Han Jong-hee recently told reporters that they are "reviewing" the possibility of pursuing M&A.

In the Netherlands, there is NXP, a semiconductor company long considered a strong M&A candidate for Samsung. In Germany, there is Infineon, an automotive semiconductor company. There is also speculation that Samsung might visit ARM, a semiconductor design (fabless) company in the UK, to discuss M&A possibilities.

If an M&A is realized, it would be a significant achievement for Samsung since the acquisition of Harman in 2016. However, obtaining approval from major competition authorities remains a significant hurdle. With global supply chain competition intensifying, M&A in the semiconductor sector is realistically challenging.

The business community is paying close attention to whether Vice Chairman Lee will deliver a new message akin to the 'New Management Declaration' during his European trip. Just as the late Chairman Lee Kun-hee ordered a sweeping innovation 29 years ago after reading the 'Fukuda Report,' which criticized Samsung for complacency and lack of creative challenges, there is speculation that Lee Jae-yong may demand a similarly large-scale innovation. Recently, a semiconductor researcher pointed out in an email to Vice Chairman Lee that there is a sense of 'crisis' within the organization, which has fallen into routine and inertia.

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