On the first anniversary of the death of the former president of Samsung, the giant has not yet found the right direction


Tencent technology news on October 25, on Monday local time, South Korea’s Samsung Group and its flagship subsidiary Samsung Electronics welcomed the first anniversary of the death of former President Lee Kun hee. As the world’s largest manufacturer of smart phones and memory chips, with the passing of the leader who has been at the helm for decades, Samsung still seems to be unable to find the right direction.
At a time when the global “chip war” and chip manufacturers in the United States and elsewhere are actively betting on changing market dynamics for strategic interests, Samsung is still hesitant and has not finalized any major investment plan. Samsung’s share price remained depressed after a brief rebound at the end of last year, which frustrated a large number of retail stock investors. Many of them devoutly bought Samsung’s shares instead of saving in the bank.
At the same time, Li zairi, the new chairman of SamSung group and the eldest son of Li Jianxi, is also in a deep legal dilemma. Since Lee Kun hee’s death, Lee, a junior vice president of Samsung Electronics, has spent seven months in prison on charges of bribing the former president in the scandal that led to park Geun hye’s impeachment in 2016. Li was released on parole in August but is currently on trial on charges of fraud and stock manipulation.
Every Thursday, Li Li attends court hearings in F. The 19th trial was held last week, calling more than 200 witnesses and reviewing more than 210000 pages of investigation records. Samsung representative said: “as the parole conditions include provisions restricting free travel and the ongoing court trial on the succession plan, the vice president has always maintained a low profile.”
Li zairi is still waiting for the court’s final judgment on the suspected illegal use of tranquilizers, which is expected to be made on Tuesday. The prosecutor demanded a fine of 70 million won (about US $59093) and a surcharge of 10.7 million won, accusing him of receiving 41 tranquilizer injections between January 2015 and may 2020. At the same time, another legal risk facing Li zairi f is that he is accused of establishing a paper manufacturing company in the British Virgin Islands in 2008. The purpose is unclear. Last week, prosecutors decided to investigate the allegations, laying the groundwork for another series of investigations and legal proceedings.
Market analysts said that although injection of tranquilizer and Chengli paper were not major problems compared with the ongoing trial of stock manipulation charges, they both posed potential risks to stock performance. Although Samsung’s performance has always been strong, its share price reflects investors’ uneasiness about the uncertain future of the company due to the turmoil in the semiconductor market.
Samsung is one of the most popular stocks among Korean retail investors. On November 2, 2020, a week after Lee Kun hee’s death, Samsung’s share price fell to the lowest point of 56000 won (about US $47.7) per share. But soon after, its share price began to rebound and hit a new high of 96800 won (about $82) on January 11 this year. A week later, Li Li was jailed again. Since then, from February to October, even after he was paroled on August 13, the company’s share price remained at a bearish level of about 60000 won (about $51).
Market analysts said: “after Lee Kun hee’s death, people once had high hopes for the new Samsung under Lee’s leadership, but the second imprisonment should have affected the attitude of foreign investors because they would think it was a major risk. However, many Koreans and investors want to see the new CEO take full control of Samsung and promote change.”
Li Zaili has three key tasks to deal with, namely, creating a new growth engine through bold investment, comprehensively reforming corporate governance and finding a solution to the relationship between trade unions and management. Although he has remained relatively silent since his release from prison, the actual leader of the technology giant is expected to appear at the forefront of managing the enterprise group again, And play a greater role than in the past year.
Shortly after Lee’s release, Samsung announced a plan to invest 240 trillion won in non memory chips, 5g and artificial intelligence over the next three years (about US $204 billion). Samsung is still seeking to expand its foundry business. At present, people’s attention is mainly focused on Samsung’s final plan to build a chip foundry in the United States, which will be a symbol of Samsung’s determination to strengthen its chip business in the global competition for the leading position in the chip market triggered by the U.S. government. Li zairi f is expected to visit the United States next month and may make the most important decision at that time Final decision.
Although Samsung has three chief executives who are respectively responsible for operating the company’s chip, smartphone and consumer electronics businesses, this major investment project of a $17 billion foundry could not be implemented without the approval of Li Zaifu. The investment bank representative said: “This is what foreign investors believe is the structural limit of South Korean Chaebol enterprises, and this is why they are concerned about the position of Li Zaili f in making investment decisions on Samsung’s future.”
However, investors are waiting for Samsung to make a major acquisition in the future growth field to enhance the company’s value. The enterprise group also said that it is preparing a meaningful acquisition, which will enhance its competitiveness, which is another important mission of Li Zaili. Despite the burden of legal risk, the vice president seems to be trying to reshape Samsung. About Samsung Electronics on a large scale Rumors of restructuring continue to circulate. Samsung is actually laying off employees in smart phones and consumer electronics through a voluntary retirement plan, which is seen as part of Li Zaidi’s determination to further strengthen his semiconductor business.
The restructuring rumors also include the possibility that Samsung may sell its network business. It is said that Cisco, headquartered in the United States, is one of the potential buyers. An employee of Samsung said: “the company is increasingly expected to announce major plans such as chip investment and network sales in the United States when Li Zaifu reappears.” (reviewed by Tencent technology / Jinlu)