SEOUL (Reuters) – For decades, authorized difficulties have forged a cloud about Samsung Electronics Vice Chairman Jay Y. Lee as he stood on the cusp of stepping out of his father’s shadow and making a identify for himself as the chief of the world-wide tech huge.
On Monday, he faces sentencing on a bribery charge that could sideline him from the world’s biggest smartphone and memory chip maker just as it appears to be to overtake rivals in places these kinds of as chip deal producing and artificial intelligence (AI).
“Samsung is at a crossroads,” explained Park Ju-gun, head of researcher CEO Rating. “COVID-19 has accelerated change, and other third-gen (Korean) company leaders are aggressively breaking into new company.”
Park cited Hyundai’s EV press and LG’s joint venture with Magna as illustrations of bold initiatives led by the grandsons of all those conglomerates’ founders.
“But Samsung has not truly found massive alterations in new company this sort of as AI since its 2016 Harman acquisition, other than growing the foundry organization, because of continued authorized threat. The future few a long time will choose no matter whether Samsung will turn out to be, say, a global system company or continue to be a hardware corporation,” he explained.
Lee, 52, has been the de facto head of Samsung Electronics because his father, Lee Kun-hee, was hospitalised following a heart assault in 2014.
The elder Lee died in Oct, but the chairmanship he held has however to be crammed, and uncertainty solid by his son’s legal problems was the main purpose, analysts reported.
Vice chairman considering that 2012, Lee has but to make a mark – as his father did – by building the semiconductor business, which now provides in 50 % of Samsung Electronics profits.
Amid the moves meant to make certain his succession, Lee has fought against allegations of lawful wrongdoing, which include a calendar year in prison in 2017-2018 in excess of a bribery circumstance involving impeached President Park Geun-hye.
1 of Lee’s focuses is Samsung’s non-memory chip business enterprise, together with chip deal producing, calling on the workers to “build yet another legend.”
Samsung designs to devote 133 trillion gained ($121.47 billion) in non-memory chips by 2030 to turn into No. 1, such as in chip agreement manufacturing, where by its 17% market place share is a distant 2nd to present-day No. 1 TSMC’s 54%, in accordance to TrendForce.
Samsung has also touted Lee’s offer-generating techniques in successful a $6.6 billion agreement from Verizon past 12 months, describing the community products enterprise – even now modest as opposed with that of rivals like Huawei – as a critical business area.
Lee also needs to deal with spending inheritance tax to sustain regulate of the tech big. Given that Lee Kun-hee handed absent, an estimated 11 trillion received ($10.05 billion) in inheritance tax is predicted to be wanted for his family to inherit his mentioned stockholdings by itself.
And he faces a separate trial more than suspected accounting fraud and inventory rate manipulation related to a 2015 merger that aided him presume bigger regulate of Samsung Electronics.
Urbane, reserved and media shy, Lee has shown a relaxed side in general public far more lately immediately after his release from detention.
He has been pictured consuming lunch in staff members cafeterias, using selfies with personnel, and smiling brightly when President Moon Jae-in visited a Samsung worksite in April 2019.
In May perhaps, he reported he would not hand over management rights to his kids and apologised for the conduct of executives caught sabotaging labour union routines.
“A genuine tremendous-course corporation is a sustainable business … I want to make a new Samsung,” Lee reported all through his closing assertion to the court in December.
(Reporting by Joyce Lee. Modifying by Gerry Doyle)
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