China seems to be Samsung chief’s next destination
Samsung Electronics Vice Chairman Lee Jae-yong (Yonhap)
Speculation is growing that Samsung Electronics Vice Chairman Lee Jae-yong may go on a work trip later this month possibly to China where the Korean tech giant is struggling to elevate smartphone and home appliance sales.
According to industry sources on Jan. 3, the de facto Samsung chief is expected to make another business trip during the court’s holiday recess that begins later this month. Lee has been appearing in court hearings every Thursday regarding the controversial merger deal between Samsung C&T and Cheil Industries back in 2015.
China is a crucial market for Samsung as it makes up almost 30 percent of its total revenue, the largest portion followed by 29 percent of the US, 16.4 percent of Asia-Africa and 12.6 percent of Europe.
But most of the sales come from chip and other parts business, while its sales of smartphones and home appliances have been sluggish due to the dominance of powerful local rivals with cheaper pricing. When it comes to smartphone sales, Samsung’s market share has remained at less than 1 percent for years.
In an apparent move to shore up its China business overall, Samsung reportedly set up a new team, called China Business Innovation Team, in a recent operational reorganization under the direct oversight of Vice Chairman Han Jong-hee, one of the new co-CEOs who oversees the consumer electronics business division.
Lee is also likely to inspect its chip business in China amid uncertainties growing over the global supply chain crisis. Samsung depends heavily on Chinese parts suppliers, while operating two chip plants there. Xi’an, in particular, is the sole overseas production base for the world’s largest memory chipmaker, with a second plant, worth $15 billion, soon to be completed there.
The Samsung chief last visited China in May 2020. At the time, he told local employees that “There is no future if we are tied to the past or content with the status quo.”
Along with China, Europe is also considered to be a possible destination. Europe is home to high-tech semiconductor equipment makers such as ASML of the Netherlands, where Samsung has poured in resources to bolster ties with local partners.
By Lee Ji-yoon (firstname.lastname@example.org)