[Lee Jae-yong's New Samsung]②Samsung Leading the Korean Economy... JY's Challenges Grow Larger

Samsung Electronics Leads Domestic Export Growth with Semiconductors
Last Year, Overseas Sales Accounted for One-Fifth of Total Domestic Exports
Samsung Electronics Also Responsible for High Job Creation Contributing to National Economy
Chairman Lee's Role in Laying the Foundation for the 'New Samsung' Gains Importance

[Asia Economy Reporter Kim Pyeonghwa] 160.2288 trillion KRW. This is the sales revenue Samsung Electronics achieved solely through exports last year. The export performance of a single company reached about one-fifth of South Korea's total export value last year, which was 644.4 billion USD (919.5588 trillion KRW). This indicates how significant Samsung Electronics' share is in the export-driven national economy.

Samsung Electronics has led domestic export growth primarily through its semiconductor business. By showcasing pioneering technology in the memory semiconductor sector and becoming a leading player competing for first and second place in the global semiconductor market, it set a record in 1995 as the first domestic company to exceed 10 billion USD in export revenue. Later, it surpassed 90 billion USD in 2018 and broke the 110 billion USD barrier for the first time last year, just three years later.

As Samsung Electronics' achievements became more visible, the proportion of semiconductors in total exports also increased. Semiconductors have held the top spot among all export items from 1992 through last year. Last year, about 20% of the country's total exports came from semiconductor products. Due to this influence, the total export value of South Korea also surpassed 100 billion USD in 1995 and reached an all-time high last year. This is why Samsung Electronics is regarded as the core of domestic export growth. The recent decline in domestic exports due to the global downturn centered on memory semiconductors can also be viewed in this context.

Samsung Electronics Chairman Lee Jae-yong is inspecting the extreme ultraviolet (EUV) line at the Pyeongtaek Campus 2nd Factory foundry production facility on January 4th this year, the first working day of the new year. / Photo by Samsung Electronics

Samsung Electronics has also made a mark by leading job creation and recruitment innovation, which are representative ways companies contribute to the national economy. Since introducing the country's first open recruitment system in 1957, it has maintained this system, claiming to provide fair opportunities to youth. This is a different approach compared to many companies recently abolishing open recruitment. Starting this year, Samsung Electronics plans to expand hiring over the next five years, recruiting 80,000 new employees including those for Samsung Electronics and other affiliates. This is a major factor that increases the domestic economy's dependence on Samsung Electronics.

It is also noteworthy that Samsung Electronics was the first in South Korea to spread meritocracy by eliminating discrimination based on academic background and gender. In 1993, Samsung Electronics established a new open recruitment for female college graduates, selecting 500 female professionals. In 1995, it removed academic qualifications from hiring criteria. This was achieved based on the talent philosophy of the late Chairman Lee Kun-hee of Samsung Group. During this process, Samsung Electronics also pioneered workplace daycare culture, which was rare at the time. Chairman Lee proactively installed daycare centers at major business sites nationwide to enable married women to work stably, setting an example for the business community.

Samsung Electronics is also the domestic company with the highest economic contribution. Economic contribution refers to the economic value created by a company's business activities shared with stakeholders such as partners, employees, shareholders, and society. According to CEO Score, a corporate data research institute, Samsung Electronics recorded 160.2288 trillion KRW in economic contribution last year, ranking first among the top 100 domestic companies. This amount exceeded the combined economic contributions of Hyundai Motor (81.5652 trillion KRW) and POSCO Holdings (6.14195 trillion KRW), ranked second and third respectively. The fact that Samsung Electronics Chairman Lee Jae-yong's first visit after his inauguration last month was to a partner company in Gwangju is also related to this.

The business community views Samsung Electronics' achievements as a foundation for building the 'New Samsung' era under Chairman Lee. While continuing the core values of previous chairmen such as technological superiority, talent management, and co-growth, there is an expectation that Chairman Lee will take responsibility for growing Samsung Electronics by finding new growth engines. The business community is watching whether Chairman Lee will continue large-scale mergers and acquisitions (M&A) and investments as he actively pursued diverse businesses through M&A in the past. Samsung Electronics' possession of over 120 trillion KRW in cash and cash equivalents also raises these expectations.

Given Samsung Electronics' significant impact on the domestic economy, the tasks assigned to Chairman Lee will become even more important amid macroeconomic downturns such as inflation, interest rate hikes, and demand decline. In May, Samsung Electronics announced plans to invest 450 trillion KRW in new businesses including semiconductors and bio industries, with 80% (360 trillion KRW) of that investment to be made domestically. Samsung Electronics explains that the success of these businesses can lead to the development of related industries and increased national income, thereby driving national economic growth. In fact, when Chairman Lee was reinstated through a special pardon on Liberation Day, he expressed his determination by saying, "I will work hard for the national economy," and "I will contribute to the economy through continuous investment and youth job creation."

Chairman Lee's strength in global networking capabilities also draws attention. During a business trip to the United States last year, Vice Chairman Lee met with leading companies in various fields such as Qualcomm, Google, Amazon, and Verizon, demonstrating this capability. The business community believes that such activities will not only prepare future growth engines for the company but also benefit national interests. A representative example is when Chairman Lee used his connections to link Pfizer and the South Korean government to secure vaccines during last year's domestic vaccine supply difficulties. Private diplomatic activities for attracting the 2030 Busan World Expo, which will be decided next year, are also planned. Chairman Lee is participating in the Busan Expo organizing committee and visited Mexico and Panama last September to seek support.