On the morning of Aug. 13, Lee Jae-yong, 53, walked out of the Seoul Detention Center in Uiwang, south of Seoul. The actual controller of the Samsung Group, wearing a gray suit and a mask, looks much thinner than half a year ago, and has added some white hair to his sideburns, but is still as approachable and polite as ever, and he told reporters at the scene: "I'm sorry to let everyone worry." I know that people have a lot of worries, criticisms, worries and expectations about me. I will try my best. Then he bent down and bowed and drove away.
Lee is known as the prince of Samsung, from childhood to adulthood has been pampered, but his life is exactly like a Korean drama, first with the elephant group Qianjin Lin Shiling's 10-year marriage ended in failure, and then succeeded Samsung in and out of the courtroom due to bribery problems, the plot is repeatedly reversed.
As for the reasons for Lee's parole, the nine-member parole review committee, chaired by Kang Sung-kok, Deputy Justice Minister of Justice, has publicly said it hopes Lee's parole will boost the South Korean economy. Is this really the case?
<h1 class="pgc-h-decimal" data-index="01" data-track="4" > what Samsung got</h1>
Compared with his domineering and arbitrary father, Lee Kin-hee, Lee Jae-yong is more approachable and approachable.
Lee Kin-hee's status at Samsung is no different from that of the emperor, with more than 100 secretaries and bodyguards accompanying him, and he is on the ground in three shifts 24 hours a day. If Li Jianxi goes abroad on business, the secretary team needs to arrive in the local area 15 days in advance to prepare a private office and residence, and the room is as small as the dishes and chopsticks, to the large electrical furniture, which must be arranged exactly like Li Jianxi's home (the boss likes to work from home). Therefore, in the Lee Jian-hee era, the most bitter and tired were the boss's secretary and bodyguard.
In the Lee era, the secretary bodyguards can finally breathe a sigh of relief, because the young lord does not have the shelf of the "domineering president" in Korean dramas: he will try to carry his own bag on business trips and not bother the secretary; he will make coffee between meetings; never use luxury goods with exaggerated LOGOs; refuse the security guards of Samsung headquarters to bow to him at 90 degrees, and will take the initiative to show their badges when entering and leaving the building. But almost all Samsung employees who have had contact with Lee Jae-yong will be full of excitement to evaluate their boss: In his capacity, he is a particularly easy-going and approachable person, has no concept of hierarchy at all, and is a good person.
Because of his open-minded image, Lee has been regarded as Samsung's international image spokesperson.
However, for the role of Samsung's successor, it is not enough to be a good business card, how to run a good business is the top priority. After Lee succeeded Samsung, Samsung mobile phone from S6, the introduction of curved screen and glass materials, products to get rid of the past large plastic, with a strong sense of design, more importantly, Samsung has shouldered the challenge of Apple and Huawei, to maintain the world's first position; Samsung semiconductor business surpassed Intel, the world's largest semiconductor company; Samsung display business continues to be a big one in the field of small size OLED, not only China's challengers are difficult to look back, the same as South Korea's LG display has not threatened its status.
It seems that Samsung has become more powerful and its corporate image has become more modern in the Lee era, which is why a considerable number of South Korean elites have asked for his parole, hoping that if Lee Changes the decision-making location from the cell to a spacious and bright office, Samsung can run faster, thus driving the Korean economy out of the quagmire caused by the epidemic faster.
However, a closer look will reveal that Lee's push for Samsung may not be as great as the outside world generally believes.
<h1 class="pgc-h-decimal" data-index="02" data-track="42" > note7 to failed self-developed CPU</h1>
Two of the most frustrating things for Samsung in Lee's era came from the mobile phone business. At the end of 2016, Samsung's flagship phone Note7 had a battery fire and explosion, which eventually forced Samsung to recall millions of products worldwide. Later investigations showed that the note7 battery explosion occurred mainly because Samsung was eager to preempt the iPhone 7 market, resulting in the product not receiving enough testing before mass production.
The note7 explosion plunged Samsung into a huge operational and brand crisis, with estimated losses of up to $5 billion. Among them, Samsung Mobile's operating profit is down 96% from a year ago. The company's position in the industry has also been impacted, the most obvious manifestation of which is the accelerated loss of Samsung's mobile phone share in the Chinese market, and eventually retreated from the first-line players to the "other" ranks.
The note7 explosion not only exposed Samsung's eagerness at the time, but also reflected the company's hierarchical corporate culture, resulting in the reluctance of low-level employees to take the risk of opposing the decisions of the superior leadership, resulting in the risk signal being blocked. The culture of obedience to the superiors began with Samsung in the Lee Kin Hee era, and it was also something that Lee had to rush to change after taking over the company, and the note7 explosion showed that although Lee Kin Hee had transferred power, the company still operated on the original track, and Lee Jae-yong's influence on Samsung was actually not as big as imagined.
Lee Kin Hee era of Samsung gambling strong, bold, the famous "counter-cyclical investment" law has made Samsung in the field of semiconductors, display panels have risen to the world's first, the mild Lee after the takeover, the practical tendency of Samsung slowly become docile, the result in a fiercely competitive market environment, but lost more.
In September 2016, under the auspices of Lee Jae-yong, Samsung sold its printer business to HP for $1.05 billion, almost a 40% discount. This move caused internal controversy among Samsung, its CFO Li Xiangxun revealed in an interview with the media that Samsung's original sale of the printer business was a trap in the "printer is already the Red Sea market" argument spread by Japanese companies, Samsung is actually promising, the printer in the company's Internet of Things strategy was once an important chess piece, is expected to obtain the world's first share, and finally was easily abandoned.
Samsung under Lee's rule began to adjust the all-encompassing octopus expansion strategy of Lee's era, focusing on core competitiveness, and selling printers was the embodiment of this adjustment, but not the only one. In November 2019, Samsung made a decision to alarm the chip industry, disbanding the 300-person chip research and development team in Austin, Texas, abandoning the self-developed CPU core Mongoose (Mongoose) and adopting ARM's IP instead. Samsung invested a total of $17 billion before and after the self-developed CPU core, which is equivalent to nearly 110 billion yuan of investment to pay tuition, this account should be counted in Lee Ken-hee or Lee Jae-yong, there is no definite conclusion, but considering that Samsung's self-developed CPU core began in 2015, such a huge investment, even if the time node of decision-making should be in the Lee Ken-hee era, but the determination of this asset clearance is undoubtedly Lee Jae-yong.
<h1 class="pgc-h-decimal" data-index="03" data-track="43" > Why was Samsung pulled away by TSMC? </h1>
In 2017, Lee Jae-yong, who ranked third in Personal Assets in South Korea, spent his 49th birthday alone in a 7-square-meter prison cell, and his birthday meal was worth only 1,400 won (about 8 yuan). Since then, in just two years, the global semiconductor industry has undergone earth-shaking changes, Qualcomm's acquisition of Broadcom (later rejected), Nvidia's acquisition of ARM, Intel's involvement in chip foundry business, TSMC's preemptive production of Samsung's 5nm chips, and the global semiconductor industry chain is undergoing a drastic reshuffle.
When the entire industry is restless, the only quiet is Samsung, but it is the old rival TSMC, building a factory to expand production, new process mass production, step by step bigger, the Samsung is farther and farther away. Because of this, there are voices in the Korean industry that Lee Jae-yong's arrest has led to the stagnation of Samsung's decision-making, especially the gap with TSMC. Samsung Electronics co-CEO Yin Fugen told South Korean media that Lee Jae-yong's trial has affected important decisions of companies such as Samsung Electronics, which may threaten competitiveness in the future.
In June 2021, South Korean President Moon Jae-in had lunch with the heads of four chaebol conglomerates in South Korea – LG, SK, Hyundai and Samsung. The meal was not easy, as the heads of the four major groups all suggested that Moon Jae-in, who was intent on suppressing the chaebols, pardon Lee for one reason: for the sake of South Korea's economy.
SK Group Chairman Choi Tae-won suggested that Samsung needs business leaders in the office, not in prison, to make quick decisions on new investments related to the chip manufacturing business.
Even the U.S. Chamber of Commerce and many U.S. companies have lobbied the South Korean government to release Lee, saying his release from prison is in the common interest of the United States and South Korea.
The results were clear, and a few months later, Lee was released from prison.
In fact, the rhetoric of capital is not a reason, because Samsung lagged behind TSMC and already existed in the era of Lee Kin Hee. In 2011, TSMC preemptive mass production of 28nm, that is, began to dominate the process world road, after which Samsung and TSMC scrambled for orders, or the same process of mass production progress lagged behind TSMC, or risked preemptive mass production of advanced process, but in the yield of the inferior, 2014-2015, Samsung risked skipping 20nm, direct mass production of 14nm, grabbed part of the apple A9 chip orders, the result of the market response is Samsung's 14nm is not as good as TSMC 16nm. Samsung's backwardness behind TSMC in terms of process and yield has continued until the current EUV era, not only in the Lee Jae-yong era, and there is no causal relationship between Lee Jae-yong and whether Lee was arrested and imprisoned.
In fact, even in prison, Lee jae-yong can still meet with executives regularly, and the result is that Samsung Electronics is still moving forward at the same pace, not only surviving the crisis of the Note 7 explosion, but also successfully releasing note 8, and the semiconductor business has surpassed Intel. Even as Samsung executives lamented that the stalled strategic decisions were still in progress, at the end of August 2017, Samsung Electronics announced that it would expand its production capacity at its flash memory manufacturing base in Xi'an, China, with a total investment of $7 billion. In April 2021, Samsung has submitted documents to the authorities of Texas in the United States, hoping to invest $17 billion to build a chip factory.
Everything shows that even if the lawsuit is entangled, even in prison, it does not delay Lee Jae-yong as the helmsman of the Three-Star Empire in exercising decision-making power, and the South Korean economy has not sneezed because Lee Jae-yong ate the lawsuit.
<h1 class="pgc-h-decimal" data-index="04" data-track="44" > repeated "Korean dramas"</h1>
Why are South Korean chaebols and American companies still lobbying the Moon administration? The answer is that there is a correlation of interest.
According to foreign media reports, at present, Lee only indirectly holds 0.58% of the shares of Samsung Electronics, but the Li family controls the entire group with less than 2% of the share capital through cross-shareholding in the group's subsidiaries. Such an intricate shareholding structure makes Samsung a complete family business, restricting the rights of other investors, and is the reason why Samsung has been criticized by the outside world.
After Lee's death, the problem facing Lee Jae-yong was how to straighten out these equity relationships and smoothly take over his father's scepter. After the succession, Lee Zairong focused on the core competitiveness strategy of Samsung Group, and carried out a drastic integration of its subsidiaries and businesses, both considering the adjustment of the company's business direction and strengthening the control of the company.
In the process, Lee jae-yong showed a more enlightened attitude than Lee Kin-hee, that is, to strengthen the decision-making position of the company's board of directors and dissolve the future strategy room of Samsung Group, the hub of Lee's power operation. Samsung Electronics, the flagship listed company of Samsung Group, has revised the articles of association, strengthened the highest decision-making position of the board of directors, and opened the board seats to foreign investors, which is obviously in the interests of AMERICAN capital, so they hope that Lee Jae-yong will be released from prison so that Samsung's current reforms can continue so that they can obtain the corresponding decision-making power for Samsung Electronics.
For the South Korean chaebols, Lee Jae-yong is hitting the rocks in the succession, and the South Korean chaebols will or are more or less facing succession problems in the future, so supporting Lee Jae-yong now is supporting himself in the future.
In short, Lee Jae-yong's release from prison, the so-called positive impact on South Korea's investment and economy is just a cover, in line with the interests of chaebols and foreign capital is the fundamental reason.
More importantly, there is a precedent for "criminal chaebols" in South Korea, and Lee Jae-yong is not the first, and his father Lee Kin-hee has received two presidential amnesties.
In 2007, Hyundai Motor's honorary chairman, Zheng Mengjiu, was sentenced to three years in prison for embezzlement and breach of trust, but a judge at the Appeals Court said that Zheng Mengjiu was too important to the national economy to serve his sentence and therefore suspended his execution.
Choi Tae-won, the chairman of the SK Group, who recommended Moon Jae-in's pardon for Lee, was sentenced to four years in prison for embezzlement, and he was pardoned by Park Geun-hye's government in 2015 for stimulating the group's investment practices.
Park Yong-jin, a member of the National Assembly of the Democratic Party of South Korea, once called the parole of Lee Jae-yong an affront to the rule of law, showing that the rich and powerful always have a way out. The drama of "criminal plutocracy" is like a Korean drama, which has been repeatedly staged in South Korea, but every time it is staged, it can always get a good voice that is not weak, this time parole Lee Jae-yong, Korean media surveys show that more than 70% of South Koreans are supportive. I don't know whether it is because of the blind worship of the power of monopoly capital or the result of the manipulation of the Korean media (the Korean chaebol controls the media through inextricable relations).
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