Investing 133 Trillion Won by 2030 to Leap to World No.1 in System Semiconductors
Samsung Electronics Vice Chairman Lee Jae-yong is entering the funeral hall at Samsung Seoul Hospital in Irwon-dong, Gangnam-gu, where the late Samsung Group Chairman Lee Kun-hee's wake is being held, accompanied by his son Lee Ji-ho and daughter Lee Won-joo on the 25th. Photo by Yoon Dong-joo doso7@
[Asia Economy Reporter Changhwan Lee] With the passing of Samsung Chairman Lee Kun-hee, the era of the 'New Samsung' led by Vice Chairman Lee Jae-yong of Samsung Electronics has begun. Vice Chairman Lee is expected to further expand investments in new business areas such as artificial intelligence (AI), secondary batteries, and 5G, centered on Samsung's core semiconductor business.
According to industry sources on the 27th, Vice Chairman Lee has announced large-scale investment plans amounting to hundreds of trillions of won over the past few years and has been reorganizing Samsung to focus on new businesses.
As a signal of this, in August 2018, Vice Chairman Lee announced a mega investment and employment plan to invest 130 trillion won domestically and 50 trillion won overseas over the next three years, generating up to 700,000 direct and indirect jobs. At that time, the plan included a focus on large-scale investments in new businesses such as semiconductors, AI, 5G, and bio.
The business Vice Chairman Lee is currently most interested in and dedicating efforts to is, of course, semiconductors. In April last year, he declared the long-term plan 'Semiconductor 2030' vision to invest 133 trillion won by 2030 and leap to become the number one in system semiconductors. System semiconductors are considered a new industry sector that will elevate Samsung Semiconductor’s status one step further, following the current solid global number one position in memory semiconductors.
In particular, he announced a vision to surpass the dominance of TSMC, the world’s number one in foundry (semiconductor contract manufacturing), by increasing foundry investments. In May this year, Samsung Electronics announced a 10 trillion won investment to build an extreme ultraviolet (EUV) foundry production line at the Pyeongtaek Campus, and in June, it revealed plans to invest 9 trillion won to establish a NAND flash production line within the same campus. Vice Chairman Lee stated, "While focusing on areas we do best, we will boldly challenge new businesses."
Another future growth engine for Samsung, AI, is a core technology of the Fourth Industrial Revolution, including semiconductors, automotive electronics, secondary batteries, and 5G. To secure AI technology, Vice Chairman Lee recruited Sebastian Seung (Seung Hyun-joon), a top scholar in the field and professor at Princeton University in the U.S., as the head of Samsung Research in June.
Director Seung is a world-renowned scholar who pioneered brain-based AI research. Since 2018, as Chief Research Scientist (CRS) at Samsung Research, he has contributed to establishing global AI centers and recruiting AI talent through advising on Samsung Electronics’ AI strategy and advanced research. Director Seung oversees future new technologies and convergence research at Samsung’s 15 global research and development (R&D) centers and 7 AI centers located in 13 countries, including Korea.
During a visit to Samsung Research last year, Vice Chairman Lee expressed strong determination to nurture future new businesses including AI, saying, "We must create a new future with technologies that have never existed before. We must prepare thoroughly, continuously challenge ourselves, and succeed no matter what."
The automotive electronics business, including secondary batteries, is also an area of interest for Vice Chairman Lee. In May, he met with Hyundai Motor Group Chairman Chung Eui-sun during a visit to Samsung SDI’s battery plant in Cheonan, Chungnam, exchanging views on next-generation electric vehicle batteries such as solid-state batteries.
The solid-state battery, whose innovative technology Samsung announced in March, is called the dream battery capable of driving 800 km on a single charge and recharging over 1,000 times. Vice Chairman Lee, who acquired the U.S. automotive electronics company Harman in 2016, has consistently shown interest in related industries.
Regarding 5G, Samsung Electronics is also leading the global 5G ecosystem, as evidenced by last month’s 8 trillion won 5G communication equipment contract with Verizon, the world’s number one telecommunications company. Samsung Electronics has also signed 5G and 4G mobile communication equipment supply contracts with AT&T, Sprint, and US Cellular. Based on this, Samsung Electronics is strongly challenging industry leaders such as Huawei and Ericsson.
An official from the electronics industry said, "With the passing of his father, Vice Chairman Lee has begun managing Samsung in earnest and will actively expand investments in new businesses he has been interested in, such as system semiconductors, AI, secondary batteries, and 5G. His management scope will broaden further."
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