Wed, August 17, 2022


Samsung’s Lee Jae-yong departs for US for chips, vaccine; signals his return to management

After staying under the radar for more than three months since his parole in August, Samsung Electronics Vice Chairman Lee Jae-yong on Sunday revealed himself at an airport in Seoul leaving for a business trip to Canada and the United States.

The Samsung Electronics executive arrived at Seoul Gimpo Business Aviation Center at around 7:45 a.m. on Sunday and hopped on a Korean Air charter flight to Canada after briefly talking to the press.

Asked whether he would finalize Samsung Electrics’ $17 billion foundry investment in the US, Lee said, “I will meet many (semiconductor) partners.” In response to a question on whether he will meet with a Moderna official, Lee answered, “I will visit Boston.” Moderna’s headquarters is based in Massachusetts, Boston.

Though details remain unclear, Lee is first expected to visit Samsung Electronics’ artificial intelligence lab in Canada and head to the US afterwards to finalize the site selection for the firm’s new chip foundry plant worth $17 billion.

This is Lee’s first overseas business trip after being released from prison in August and his first business travel to the US since 2016.

The Samsung chief’s direct visit to the US signals the 53-year-old leader’s return to management of Samsung, which suffered a leadership void during his absence amid an intensifying global chip war.

Earlier this year Samsung’s greatest rival TSMC pledged to spend $100 billion over the next three years to boost foundry capacity. Though Samsung Electronics’ cash reserves reached a record 209 trillion won ($177.1 billion) in July, the company did not proceed with aggressive chip expansion when Lee was serving time for bribing ousted former President Park Geun-hye.

Now, all eyes are on how the vice chairman would navigate the world’s biggest memory chip and mobile phone maker and manifest “New Samsung,” a slogan Lee proclaimed on Oct. 25, which was the first anniversary of the death of his father, Lee Kun-hee.

In lock step with New Samsung vision, Samsung Electronics announced last week that it would overhaul its job ranking system to upgrade its evaluation and promotion system.

During his US visit, Lee is expected to meet with local government officials and iron out final details for the $17 billion foundry plant. While the city of Taylor in Texas is viewed as the strongest contender, Samsung has left other options open, such as Phoenix in Arizona and upstate New York.

Some view that Lee might well visit Austin in Texas -- where Samsung’s foundry plant No. 1 is located -- and even meet with Qualcomm CEO Cristiano Amon. Major clients of Samsung are located near the Austin plant including Qualcomm and Nvidia.

Also, it remains to be seen whether Lee will meet with the Moderna CEO Stephane Bancel, who agreed to supply the first batch of COVID-19 vaccines manufactured in Korea for local use at Lee’s request.

Lee has used his personal connections to reach out to Bancel, as Korea struggled with vaccine shortages. The two agreed to prioritize 2.4 million doses of Moderna vaccines manufactured at Samsung Biologics’ factory in Songdo, Incheon, to the Korean government starting this month.

Published : November 14, 2021

By : The Korea Herald