Samsung Completes Preparations to Expand Foundry Business... Focuses on Laying the Foundation for 'Lee Jae-yong's New Samsung'

WSJ "Second Production Base Confirmed in Taylor"... Advanced Processes Below 5nm Expected
Vice Chairman Lee to Strengthen Organization with Executive Appointments and Focus on Future Growth Opportunities

Lee Jae-yong, Vice Chairman of Samsung Electronics [Photo by Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] Samsung Electronics has finalized the site for its second semiconductor factory in the United States after more than 20 years, completing preparations for a full-scale expansion of its foundry (semiconductor contract manufacturing) business. Following his parole, Vice Chairman Lee Jae-yong of Samsung Electronics, having resolved two major challenges?vaccines and semiconductors?appears set to focus on laying the foundation for the 'New Samsung' by tightening the organization through executive appointments ahead of the year-end and dedicating himself to discovering future growth engines for Samsung.

According to a report by The Wall Street Journal (WSJ) on the 22nd (local time), based on the official announcement by Texas Governor Greg Abbott and Samsung Electronics' disclosure, the Taylor plant, Samsung's second semiconductor production base soon to be finalized, is expected to implement advanced processes below 5 nm (nanometers; 1 nm equals one billionth of a meter). This is because the U.S. government has actively expressed its need for advanced processes, and Samsung is expected to attract a large number of clients with advanced processes in preparation for increased collaboration with world-class U.S. fabless companies.

Furthermore, the Taylor plant is anticipated to become Samsung's forward semiconductor base in the U.S. to respond to the industry leader Taiwan's TSMC expanding its advanced process technology and production competitiveness through its Arizona plant construction, and U.S. Intel, which has declared the resumption of its foundry business and continues factory investments in Arizona and New Mexico with government support.

After much deliberation, Vice Chairman Lee, having confirmed the U.S. semiconductor investment, is expected to unveil his vision for the New Samsung through upcoming executive appointments. Currently, a regular personnel reshuffle is anticipated in early next month, though opinions vary on the scale of the changes. While some expect a large-scale reshuffle due to organizational restructuring, others predict a smaller scope of executive changes since Vice Chairman Kim Ki-nam, Consumer Electronics (CE) Division President Kim Hyun-seok, and IT & Mobile (IM) Division President Ko Dong-jin were all reappointed at the shareholders' meeting last March.

Following the personnel reshuffle to reorganize the structure, Vice Chairman Lee is expected to focus on discovering future growth engines. During his recent visit to the U.S., he held multiple meetings related to future strategic businesses such as bio, next-generation mobile communications, virtual reality (VR), augmented reality (AR), and the metaverse (extended virtual world). Amid significant global uncertainties, he is expected to maintain steady management into next year and show interest in mergers and acquisitions (M&A) for Samsung's long-term growth. As of the third quarter, Samsung Electronics holds cash reserves amounting to 120 trillion won, and at the shareholders' meeting last March, Vice Chairman Kim stated that the company would actively pursue M&A.