Visit to the Netherlands and Germany until the 18th
First destination ASML... Likely to personally oversee EUV equipment supply
Focus on large-scale M&A... NXP and Infineon mentioned
Samsung Electronics Vice Chairman Lee Jae-yong is departing for a business trip to Europe on the 7th through the Gimpo Business Aviation Center (SGBAC) in Gangseo-gu, Seoul. Photo by Kim Hyun-min kimhyun81@
[Asia Economy Reporter Jin-ho Kim] Samsung Electronics Vice Chairman Lee Jae-yong has resumed his overseas business activities after six months. This is his first trip to Europe since his visit to the Middle East in December last year, and it is analyzed that the main purposes are to 'inspect local businesses' and 'discover future growth engines.' In the business community, there are also expectations that the outline of the large-scale mergers and acquisitions (M&A) currently underway will be revealed.
According to the business community on the 12th, Vice Chairman Lee is scheduled to visit major European countries such as the Netherlands and Germany until the 18th.
Earlier, Vice Chairman Lee departed for Europe on the 7th, the 29th anniversary of the late Chairman Lee Kun-hee's so-called 'New Management Declaration' in Frankfurt, Germany. Before his departure, when asked about the 'people he would meet during the business trip' and the 'expected M&A outcomes,' he briefly replied, "I will come back safely." The business community is focusing on Vice Chairman Lee's move to Europe on this monumental day, which marked the rise of Samsung to the world's top tier with the admonition to "change everything except your wife and children."
Vice Chairman Lee's first destination is reportedly the global semiconductor equipment company ASML headquarters in Eindhoven, Netherlands. ASML is the sole producer of extreme ultraviolet (EUV) lithography equipment essential for semiconductor fine processes.
For Samsung, a latecomer in the foundry (semiconductor contract manufacturing) market, securing EUV equipment is an essential task to narrow the gap with Taiwan's TSMC. The problem is supply cannot keep up with demand. According to the securities industry, ASML's shipments this year are only 51 units. Of these, Samsung is said to have secured 18 units, and TSMC 22 units.
Especially as the United States and Japan are also beginning to invest seriously in foundries, the behind-the-scenes competition to secure EUV equipment is expected to intensify day by day. From Samsung's perspective, which recently declared the goal of becoming a 'semiconductor superpower,' it is necessary for Vice Chairman Lee to personally strengthen the cooperative relationship with ASML. A semiconductor industry insider said, "Even if you have money, you cannot buy EUV equipment," adding, "As competition to secure EUV equipment intensifies, it is interpreted as a willingness by top management to personally step in and resolve this."
There are also expectations that Samsung's large-scale M&A will become more visible through Vice Chairman Lee's European trip. The industry is cautiously predicting the possibility of Samsung acquiring a vehicle semiconductor company. Samsung Electronics Vice Chairman Han Jong-hee recently told reporters that they are "reviewing" the possibility of pursuing M&A.
In the Netherlands, there is semiconductor company NXP, which has long been considered a strong M&A candidate for Samsung. In Germany, there is vehicle semiconductor company Infineon. There is also speculation that Samsung may visit ARM, a semiconductor design (fabless) company in the UK, to discuss M&A.
If the M&A is realized, Samsung will achieve meaningful results since acquiring Harman in 2016. However, the approval issues from major competition authorities remain a hurdle. With global supply chain competition intensifying, M&A in the semiconductor field is realistically not easy.
The business community is also paying attention to whether Vice Chairman Lee will deliver a new message similar to the 'New Management Declaration' during his European trip. Just as the late Chairman Lee Kun-hee read the 'Fukuda Report' 29 years ago and ordered a sweeping innovation, criticizing Samsung for being complacent and not taking creative challenges, there is speculation that Vice Chairman Lee may demand a similarly large-scale innovation. Recently, a semiconductor researcher pointed out in an email to Vice Chairman Lee that there is a sense of 'crisis' in an organization mired in stagnation and inertia.
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