Lee Jae-yong’s ‘New Samsung’ vision taking shape

Samsung Electronics Vice Chairman Lee Jae-yong has returned home after a packed North American trip, with his vision for the “New Samsung” taking shape and putting a renewed emphasis on chip business.

During his 10-day visit to the US and Canada, Lee held a series of meetings with prospective clients, partners and political leaders and finalized the tech giant’s $17 billion US fab investment.

Upon his arrival in Seoul on Wednesday afternoon, the tycoon said the responsibility weighs heavily on him after having seen the “harsh reality of the market,” suggesting the tech giant has a long way to go, despite the massive investment it just finalized with an aim to usher in a new chapter.

“It was a meaningful trip, during which I exchanged views with my old partners,” he told reporters at a Seoul airport. Asked about future plans following the latest investment, he said, “Now I have a heavy heart after listening to desperate voices on the scene and witnessing the harsh reality of the market.”

He declined to further elaborate on issues discussed during the trip, including any new potential partnerships with Google.

Samsung’s plan to build a second foundry plant in the US was announced in May on the sidelines of the first summit between Presidents Moon Jae-in and Joe Biden. But the final decision of the plant site had been delayed amid the protracted leadership vacuum at Samsung.

Lee, who walked free in August after serving prison time for corruption, picked the US as his first business trip destination and met with local government and White House officials to decide on the city of Taylor, Texas, as the plant site. It was his first North American trip in five years.

Samsung has needed to make bold investments and acquisitions amid a global chip shortage, but key decisions have been postponed during years of the de facto leader being bogged down by legal woes.

Starting with the latest US fab investment, Samsung’s renewed logic chip push is expected to gain a big boost.

Samsung, the world’s largest memory chip maker, has pledged to become the No. 1 logic chip maker by 2030, with a whopping 171 trillion won ($144 billion) being poured into the sector. Logic chips are more advanced computer chips that power high-end mobile devices and autonomous cars.

The US foundry plant, in particular, would help Samsung expand its presence in chip contract manufacturing in the US, where rivals TSMC and Intel are raising the stakes amid the chip crunch.

“We cannot go through this huge transitional period by just widening the gap with competitors,” Lee said in his visit to the tech giant’s two research centers in Silicon Valley this week. “We should make a new Samsung by forging a future that has never been imagined.”

His remarks may refer to the “Super Gap” strategy, under which Samsung has poured in resources to outpace rivals by a wide margin and become the unrivaled No. 1 in a field. But Lee was saying that is not enough, calling for a more drastic change for a “New Samsung,” under a vision he declared in January.

Given that securing more clients is crucial in an already crowded logic chip market, Lee is also seeking to rebuild his global network and bolster ties with existing partners.

Before returning to Seoul, Lee met with Google parent company Alphabet’s CEO Sundar Pichai at Google’s headquarters, with their partnership on chips and other future technologies like virtual reality and autonomous topping the agenda.

Observers say Google’s upcoming Pixel 6 smartphone is highly likely to feature Samsung’s application processor, further enhancing the long-held Samsung-Google partnership, known as the “Android alliance.”

Lee also held meetings with leaders of Moderna, Verizon, Microsoft and Amazon, the key partners for Samsung’s bio, 6G, artificial intelligence and chip businesses.

Now keen attention is being paid to Lee’s next move. Conditionally released in August, he still faces employment restrictions for the next five years, which means he cannot take jobs at Samsung. For the latest trip, he had to get approval from the Justice Ministry.

For the restrictions to be eased, he could file a petition with the ministry, but it remains to be seen whether he would take that step considering he has maintained a low profile, possibly sensing public anxiety over his release.

Lee also stands trial on charges of fraud and stock manipulation. He has claimed his innocence. 

Amid a mixed outlook for his return to management, the upcoming executive reshuffle early next month is expected to offer a clearer glimpse into Lee’s “New Samsung” vision. A global strategy meeting of executives around the world is also planned to be held next month to map out business plans for next year. 

By Lee Ji-yoon and Sohn Ji-hyoung
(jylee@heraldcorp.com) (consnow@heraldcorp.com)