[40 Years of the Tokyo Declaration] ④ Lee Jae-yong's Pursuit of 'Unprecedented Technology'

New Samsung's Keyword is 'Technology'
450 Trillion Won Investment Over 5 Years
Blueprint Presented for System Semiconductors, Bio, 6G, AI, etc.
Samsung Writes the 'Second Semiconductor Miracle'

[Asia Economy Reporter Han Ye-ju] "We must invest in technologies that do not yet exist in the world. Our survival depends on future technologies. The best technologies are created by outstanding talents." (October 27, 2022, Inaugural speech within the company)

"Let's create the future with technologies that do not exist in the world." (August 19, 2022, Giheung Semiconductor R&D Groundbreaking Ceremony)

"No matter how much I think about it, the first is technology, the second is technology, and the third is technology." (June 18, 2022, upon returning from a business trip to Europe)

The challenge for the New Samsung led by Samsung Electronics Chairman Lee Jae-yong is how to maintain and develop the current 'technology super-gap.' Samsung developed technologies that competitors cannot rival, elevating the memory semiconductor industry to the top of the world, but in future industries such as system semiconductors, electric vehicle batteries, and automotive electronics, it has not secured differentiated competitiveness. Amid the intensifying technological hegemony between the U.S. and China, global supply chain restructuring, competitors' growth, and rapid market changes, Chairman Lee’s determination appears firm that the solution for future growth in these difficult times is, indeed, 'technology.'

The technology investment plan publicly announced by Chairman Lee is to pour 450 trillion won over five years into semiconductors, bio, and new growth IT (next-generation communications and AI). This is an increase of 120 trillion won compared to the 330 trillion won invested by Samsung over the past five years, representing an increase of more than 30% in the average annual investment scale. Chairman Lee also expressed strong determination about this investment plan, saying it is something he is "betting his life on."

The undisputed leader in 'future growth engines' is system semiconductors. In 2019, Samsung Electronics announced the 'Semiconductor Vision 2030,' aiming to achieve global No. 1 in the system semiconductor field by 2030. This was based on the judgment that competitiveness was needed in fabless (semiconductor design) and foundry sectors, which have larger markets and growth potential than memory semiconductors. The goal is to surpass Taiwan's TSMC, the world's No. 1 foundry company. If Chairman Lee’s 'Semiconductor Vision' is realized, Samsung can leap to become the unprecedented company leading all three major semiconductor sectors: memory, fabless, and foundry. This would have an effect similar to creating a company larger than the current Samsung Electronics within Korea.

In the bio sector, aggressive investments have also been made with the goal of realizing a 'second semiconductor miracle.' Bio can also serve as a connecting link for the second Korea-U.S. economic security alliance following semiconductors. In the mid-to-long term, Samsung plans to build a business structure centered on bio pharmaceutical contract development and manufacturing organization (CDMO) and biosimilars. Once the under-construction Samsung Biologics Plant 4 is completed, CDMO production capacity will reach 620,000 liters, propelling it to an overwhelming global No. 1 position.

Chairman Lee is also known to have a strong attachment to next-generation communications. Having led Samsung Electronics to pioneer the 5G (5th generation mobile communication) era across all areas, he is proactively preparing for the 6G (6th generation mobile communication) field. Samsung Electronics is conducting long-term investments in advanced communication equipment with a long-term perspective, expecting the mobile communication business to grow into a 'flagship business' of the Lee Jae-yong era, comparable to the 'semiconductor miracle.' Regarding artificial intelligence (AI), Samsung is conducting advanced technology research through seven global AI centers worldwide while promoting talent recruitment and professional workforce development. Samsung Electronics utilizes AI technology not only in semiconductors but also in mobile devices, TVs, home appliances, and virtually all business sectors, sharing innovation achievements through initiatives such as the 'Samsung AI Forum.'

However, the prevailing evaluation is that, unlike former Chairman Lee Kun-hee’s challenge in the semiconductor business, Samsung may not venture into entirely new businesses it has not previously engaged in. This implies that it is difficult to find a market with an annual scale of hundreds of trillions of won that can sustain continuous growth and aligns with Samsung Electronics’ manufacturing strengths, as semiconductors do. Going forward, Samsung is expected to invest about 100 trillion won annually and must provide answers to this difficult challenge.