Writer / Tiger Knife & Pigeon nagging
Amid the controversy, the South Korean side announced that Lee Jae-yong, the actual head of Samsung, would be pardoned.
Many analysts believe that his amnesty has benefited from the increasingly fierce chip war around the world. It also means that soon, Lee will be able to actually advance Samsung's previously announced plan to invest $17 billion in the United States to build a fab. This is Samsung's largest investment in the United States and is also seen by the United States as an important step in consolidating the "chip quad alliance" dominated by the United States.
So, does his amnesty represent a trend that South Korean industry will want to "fall to the United States" in an all-round way?
1
The South Korean presidential office said that the actual head of Samsung, Lee Jae-yong, will be pardoned on the 15th.
Meanwhile, several other prominent South Korean business leaders, including Rakuten Group Chairman Shin Dong-bin, have also received presidential amnesty.
The reason Yin Xiyue gave was that he hoped to unite the whole country and overcome the economic crisis.
Lee Jae-yong, the only son of Lee Kin-hee, the second-generation head of Samsung, is 54 years old and was previously released on parole a year ago after being sentenced to 30 months in prison for accepting bribes, subject to a five-year restriction on employment and overseas travel restrictions.
Over the past year, Lee has kept a relatively low profile. He has taken some business trips to the United States, Europe and the Middle East, and has represented Samsung at a number of public events.
Still, the decision has caused a lot of controversy in South Korea.
The parole decision was announced after a joint statement from South Korea's civil society group saying that pardoning Lee and other business leaders in the name of economic revival was "tantamount to letting thieves protect warehouses." ”
The joint statement said South Korea's tolerance is only given to those who disrupt and disrupt the economic order.
South Korea's conglomerates welcomed this. The Korea General Association of Managers said in a statement that the amnesty gave entrepreneurs an opportunity to return to the forefront of management amid global economic turmoil and increased competition.
On social platforms, many netizens supported the pardon of Lee Jae-yong, saying that they expected Lee jae-yong to play a positive role in South Korea's economic development in the future. However, some netizens satirized that pardoning Lee Jae-yong is a power-money transaction, "Of course, pardon Lee Jae-yong." He is the person who pays the most taxes in South Korea", "The Republic of Korea is indeed a legal < the stereotype of power < money" "It's really dirty."
Technically, Lee has been a non-registered director of Samsung Electronics since October 2019, while retaining the title of vice chairman of Samsung Electronics.
Industry experts say it could also speed up Lee's appointment as chairman of Samsung Group. The position has been vacant since his father's death in 2020.
Although there is a huge controversy in South Korea about the amnesty of Lee Jae-yong, the analysis generally believes that this has already surpassed a large number of government lobbying by south Korean chaebols and political groups. One of the important reasons is that Samsung Group's business decisions are related to South Korea's national interests.
Because Lee Jae-yong's return to dominate Samsung Group will undoubtedly help enhance the international competitiveness of the Korean chip industry.
At present, the global chip competition is fierce, and South Korea will also promote the development of the chip industry to the status of "national strategy". According to data released by the Ministry of Industry, Trade and Industry in early 2022, the export value of semiconductor products in 2021 reached a record high of $128 billion, accounting for 20% of South Korea's total exports. Semiconductors have become the largest "first-class hero" in South Korea's total exports for 10 consecutive years.
And what does Samsung mean for the Korean semiconductor industry?
Since the late 1970s, South Korea's Samsung has been engaged in the manufacture of electronic products such as transistor TVs, mobile phones, and microwave ovens, and embarked on the road of developing wafer manufacturing and memory chip design.
Whether from the perspective of the field of involvement or the size of assets, among the many chaebol groups in South Korea, Samsung is currently the largest one.
In fact, some people in South Korea have long proposed that Lee Jae-yong's amnesty this time is related to the fierce competition for semiconductors facing the world.
Last month, Park Sung-jung, who is part of the National Forces Party with Yoon Seok-wook and has been re-elected to parliament for two consecutive terms, questioned South Korean Prime Minister Han Deok-so and bluntly said, "The world is in a semiconductor war," "It's time for our commander to lead, and I think it is necessary to pardon Vice President Lee Jae-yong, one of the commanders... Do you have a plan to propose a pardon to the president for Lee Jae-yong? ”
Han Deok-so replied, "Yes, I would suggest it."
"Asia Economics" analysis said that in the case of the intensification of the semiconductor hegemonic war, Yin Xiyue government to become a semiconductor super powerful country, etc., it is expected that Lee Jae-yong will shoulder heavy responsibilities.
2
In view of the important position of South Korea and Samsung in the global semiconductor industry chain, they have naturally become the "fragrant food" in the eyes of Washington.
After Lee was imprisoned, the United States repeatedly pressured the South Korean government to release him.
Before Lee was parole last year, the American Chamber of Commerce in South Korea also wrote a letter "urging" the Government to pardon Lee, saying that Lee could help US President Biden's semiconductor manufacturing program "help.".
One of Lee's most notable recent appearances was when U.S. President Joe Biden visited a Samsung chip factory in South Korea in May.
At that time, Lee jae-yong was also present.
In his speech on the same day, Biden thanked Samsung for investing in the United States and said that he believed that the world's top semiconductors would be put into production at Samsung Electronics' Taylor plant. Samsung has created more than 20,000 jobs in the United States, and this investment will create another 3,000 quality new jobs in Taylor City.
Lee's response was also positive, saying that Samsung was the world's first company to manufacture semiconductors in the United States 25 years ago, and he respected Han-U.S. friendship and expressed hope that it would develop further.
In December last year, Lee began a rare high-profile visit to the United States. At that time, his trip was called "semiconductor diplomacy", during which he was also invited to the White House as a representative of foreign companies to secretly meet with core staff.
I don't know what was discussed, but shortly after the meeting, Samsung Electronics and the Texan government officially announced Samsung's decision to spend $17 billion to build a new wafer foundry in Taylor City. This is Samsung's largest investment in the U.S. so far, and it is poised to adopt state-of-the-art 3nm technology.
So far, Samsung's attitude towards strengthening cooperation with the United States in the chip industry chain is relatively positive.
Samsung said that the re-establishment of a factory in the United States is to build a trans-Pacific "semiconductor belt" connecting Hwaseong, Kiheung, Pyeongtaek and Texas, and that factories in South Korea and the United States will operate in the "same server".
According to the media, after Lee Jae-yong was pardoned, the most urgent business task is probably to finalize the specific details of Samsung's future investment in the semiconductor field as soon as possible. Rumors of a $17 billion U.S. fab construction and a machine-seeking annexation of a multi-billion-dollar to hundreds-billion-dollar international chip leading company await his decision.
Facing strong pressure from the United States, South Korea is being asked to join the "Chip Quad Alliance", which brings together chip manufacturers, designers and material suppliers from the United States, South Korea, Taiwan and Japan to cooperate in human resources, research and development, supply chain and other aspects to build an advanced semiconductor ecosystem.
The first meeting of the coalition is expected to take place in early September this year.
At present, Samsung is the world's largest memory chip manufacturer, accounting for more than 40% of the global DRAM chip market. DRAM chips are widely used in personal computers and servers.
In addition, Samsung also supplies 1/3 of the NAND flash memory chips for smartphones and other products.
However, competition in the chip industry is becoming increasingly fierce, and Samsung is facing the crisis of losing its competitive advantage in the chip business, which is why Lee Jae-yong was pardoned at the current point in time.
Since the death of Lee Kin-hee, the second-generation head of Samsung Group, on October 25, 2020, Samsung has been unable to initiate a major acquisition.
Earlier this year, Qualcomm and Nvidia, two of the largest customers in Samsung's chip foundry business, were snatched away by TSMC. Both customers were disappointed by Samsung's inability to stably supply 4nm and 5nm chips.
According to market research firm TrendForce, in the first quarter of 2022, TSMC's share of the global chip foundry market was 54%, more than 3 times that of Samsung.
In terms of Samsung's advantaged DRAM memory chips, rivals Micron and SK Hynix are launching more advanced chips faster.
According to market research firm Strategy Analytics, Samsung's share of the smartphone app processor market has fallen by almost half since 2019, ranking fourth last year with a 6.6 percent share. That compares with Qualcomm's share of 37.7 percent, MediaTek's at 26.3 percent and Apple's at 26 percent.
Dylan Patel, principal analyst at SemiAnalysis, wrote in a recent research note: "Samsung's technological advantage is collapsing. Samsung is on a slippery slope in every aspect of its technology development, including one area that has beaten all competitors in the past: DRAM. ”
3
For Lee Jae-yong's amnesty this time, Zhan Debin, a professor in the Department of International Relations at Shanghai University of International Business and Economics, told "Make up a knife" that it is not unreasonable to say that he is a beneficiary of the global chip war.
In view of the fact that chip exports are currently one of the important economic lifelines for South Korea, and the global chip is in an increasingly fierce competition, this provides a friendly environment for Lee Jae-yong's amnesty in public opinion.
In fact, during the Moon Jae-in administration, Lee Jae-yong had been "parole", and many activities related to corporate management decisions had been substantially resumed, but some of his actions such as holding his position were still restricted. In the eyes of some people in South Korea's financial circles, large-scale investment and long-term planning in the semiconductor field are particularly important, and leaders who can be responsible and decisive require this. As the head of Samsung, Lee Jae-yong is still saddled with legal restrictions and cannot play a full command role for enterprises, which is not conducive to the development of South Korea's entire semiconductor industry and participation in international competition.
In addition, US President Joe Biden visited Asia in May, the first stop of which was a visit to the Samsung Semiconductor Industrial Park in Pyeongtaek, South Korea, which also played a certain role in promoting Lee Jae-yong's amnesty. At that time, South Korean President Yoon Seok-yue also accompanied Biden to inspect Samsung's semiconductor factories and gained a better understanding of the important position of semiconductors in the global status and the lifeblood of the national economy.
After Biden's inspection, Lee announced that Samsung will invest 450 trillion won (about 2.37 trillion yuan) in the next five years, which can be described as a big deal in chip semiconductors and other fields. Subsequently, Yin Xiyue's government said it would invest 1.02 trillion won (about 5.2 billion yuan) in research and development of cutting-edge technologies for artificial intelligence (AI) semiconductors.
Therefore, behind Lee's amnesty is the reflection of South Korea's "ambitions" in the entire global semiconductor field. In the eyes of Samsung and South Korea, the current Russian-Ukrainian conflict, the Sino-US game and the tension between the two sides of the strait may give it a chance. How to ensure that the entire supply chain, from equipment, design, OEM to the market is not affected, is its main goal, on this basis, it is necessary to actively use the opportunities that the geopolitical situation may bring.
This can also be seen in Lee's recent trip. After accompanying Biden on a factory tour in May to demonstrate a process that had just been ready to be put into production of 3NM, Lee met with Intel CEO Pat Kissinger to discuss chip cooperation. Since then, Lee has embarked on a 12-day trip to Europe, meeting with strategic partners such as European chip device maker ASML to repair its network in Europe and the United States.
On the one hand, South Korea wants to cling to the United States and catch up with TSMC in the field of foundry. South Korea's semiconductor dependence on the United States is as high as 40%, if the relationship with the United States is not good, from the design to a lot of hardware equipment will be affected, can only watch TSMC profitable, and even in the United States this round of investment even the opportunity to OEM.
According to some people in South Korean public opinion, Samsung and its choice represent a trend of Korean industry to "fall to the United States" in an all-round way. However, in Zhan Debin's view, this cannot be used as a complete criterion for judgment.
From the perspective of the enterprise, survival and profit maximization are the biggest criteria. For Samsung, relying on the United States is to some extent a matter of survival, and it also takes the opportunity to pursue the maximization of interests, which does not mean that this is a political choice between China and the United States. It would be more ideal for companies to use politics rather than selective politics, and they know that it would be a bad idea to target factors other than profit.
On the other hand, Samsung and South Korea do not want to give up the Chinese market. For enterprises, if there is no market, technology alone is useless. And for South Korea's large enterprises, in addition to chips, there are many other industries in China, which is a problem of the whole big ecology. They don't want to affect other interests in China because of the chip thing.
Therefore, although the Korean semiconductor industry is currently on the rise in the global semiconductor industry pattern, they also know that a good balance within their capabilities is the key to safeguarding their own interests.
Image from the web