Samsung chief’s two-week trip coincides with 29th anniversary of “New Management” declared in Frankfurt by his late father
Samsung Electronics Vice Chairman Lee Jae-yong enters Seoul Gimpo Business Aviation Center in Gangseo-gu, Seoul, to leave for a two week business trip to Europe on Tuesday morning. (Park Hae-mook/The Korea Herald)
Samsung Electronics Vice Chairman Lee Jae-yong on Tuesday left for Europe, home to key partners of the world’s largest memory chip maker’s renewed push for chip supremacy.
Upon his departure from Seoul’s Gimpo Airport earlier in the day, some 50 journalists shouted questions on the purpose of the trip and plans for any new deals, but the Samsung chief declined to answer any of them.
Lee’s Europe trip comes six months after his last trip to the Middle East in December. Released on parole after serving prison time for corruption charges, Lee still faces work and travel restrictions.
During the 12-day trip, Lee is scheduled to visit several countries, including the Netherlands, Germany and France. Samsung SDI CEO Choi Yoon-ho, also took the same flight but the battery maker declined to confirm if he was accompanying Lee on his trip.
Dutch chip equipment giant ASML, among others, is expected to be Lee’s first stop.
ASML is the world’s sole producer of extreme ultraviolet lithography systems that are crucial to manufacturing advanced chips, but the supply of which is extremely scarce and costly.
Samsung, despite its minority stake in the company, also competes head-on with chip rivals like Intel and TSMC to secure more ASML machines, whose production reportedly has hit a snag more recently due to chip shortages.
“Lee’s visit could play a role for Samsung to purchase more ASML machines amid a tight supply,” said Park Jea-gun, an electronics engineering professor at Hanyang University, adding ASML produces about 50 units of the machines every year.
According to industry sources, Lee is also said to be seeking a meeting with Dutch Prime Minister Mark Rutte to discuss ways to bolster ties between the two countries on chips and other tech fields.
Lee’s latest trip is also raising expectations about Samsung’s long-delayed “big deals.” Since its $8 billion Harman International deal in 2017, no major deal has been announced by Samsung, despite ample cash reserves.
Samsung is frequently cited as a potential bidder for UK microchip designer Arm, whose deal price is estimated at about $40 billion. Due to the huge deal size as well as regulatory hurdles, a multinational consortium is being created to win the deal.
Samsung’s crosstown rival SK hynix has hinted at its intention to join the consortium along with US chip giants like Intel and Qualcomm. Lee’s recent meeting with Intel CEO Patrick Gelsinger in Seoul also fueled speculation about Samsung’s adding to the consortium.
Other possible acquisitions in Europe include automotive chip makers like the Netherlands’ NXP and Germany’s Infineon.
Park, who also doubles as the head of the Korean Society of Semiconductor & Display Technology, stressed that large merger and acquisition deals were a time-consuming process, saying it is unlikely for his visit to lead to a big deal immediately.
“Those rumored deals, if realized, would offer a boon for Samsung’s chip business. Actually, Samsung’s any new attempt is a welcoming news for the market,” he added.
Last month, Samsung announced plans to invest 450 trillion won ($357 billion) over the next five years, with renewed emphasis on chips, health care, the 6G network and artificial intelligence.
Samsung has pledged to widen gaps with its memory rivals, while aiming to become a market leader in more advanced logic chips by 2030.
Meanwhile, Lee’s Europe trip comes on the same day his father, the late Chairman Lee Kun-hee, declared the “New Management” initiative in Frankfurt, Germany, 29 years ago. At the time, the chairman convened all Samsung executives and urged them to undertake drastic change, saying, “Change everything except your wife and children.”
The declaration is said to have paved the way for Samsung to become a leader in home appliances, smartphones and chips decades later. In May 2020, the junior Lee also unveiled his vision for “New Samsung,” pledging to revamp its rigid corporate culture to become more flexible and creative.
By Lee Ji-yoon and Son Ji-hyoung