Samsung's Jay Y. Lee about to step out of the daddy's shadow

© Reuters. FILE PHOTO: Jay Y. Lee, vice chairman of Samsung Electronics, leaves the Seoul Supreme Court in Seoul

From Joyce Lee

SEOUL (Reuters) – Legal troubles have cast a cloud over Samsung Electronics (OTC :), vice chairman Jay Y. Lee for years as he stood on the verge of stepping out of his father's shadow and making a name for himself as a leader of the global Technology giant.

On Monday, he was convicted of bribery that could dissuade him from the world's largest manufacturer of smartphones and memory chips as he tries to overtake competitors in areas such as chip job manufacturing and artificial intelligence (AI).

"Samsung (KS 🙂 is at a crossroads," said Park Ju-gun, head of CEO CEO Score. "COVID-19 has accelerated change and other third generation (Korean) executives are aggressively breaking into new businesses."

Park cited Hyundai's EV-Push and LG's joint venture with Magna as examples of ambitious initiatives led by the grandchildren of the founders of these conglomerates.

"But Samsung hasn't seen any big changes in new business like AI since taking over Harman in 2016, other than the foundry business expanding due to the ongoing legal risk. In the next few years, a decision will be made whether Samsung will become a global platform, for example." Company or remain a hardware company, "he said.

Lee, 52, has been the de facto head of Samsung Electronics since his father, Lee Kun-hee, was hospitalized after a heart attack in 2014.

The elder Lee died in October, but the chair he held has yet to be filled, and uncertainty over his son's legal troubles was the main reason, analysts said.

Lee, vice chairman since 2012, has – like his father – not yet made a name for himself by building the semiconductor business, which now generates half of Samsung Electronics' profits.

Amid measures to secure his succession, Lee has fought allegations of legal violations, including one year in prison in 2017-2018 for a bribery case involving the indicted President Park Geun-hye.


One of Lee's areas of focus is Samsung's non-memory chip business, including making chip orders, and staff are urged to "create another legend".

Samsung plans to invest 133 trillion won ($ 121.47 billion) in non-memory chips by 2030 to become # 1, including making chip orders where its 17% market share is a far cry from the current 54 % of TSMC # 1 is to TrendForce.

Samsung also touted Lee's deal-making abilities after winning a $ 6.6 billion deal from Verizon (NYSE 🙂 last year, and the network equipment business – still comparing it to rivals like Huawei is small – referred to as an important business area.

Lee also has to deal with paying inheritance tax to keep control of the tech giant. Since Lee Kun-hee's death, an estimated 11 trillion won ($ 10.05 billion) inheritance tax has been required for his family to inherit his listed shares on their own.

And he faces a separate lawsuit over alleged accounting fraud and stock price manipulation related to a 2015 merger that helped him take better control of Samsung Electronics.


Urban, reticent and media-shy Lee has recently shown a relaxed side to the public after his release from prison.

He was pictured having lunch in staff cafeterias, taking selfies with staff, and smiling brightly when President Moon Jae-in visited a Samsung construction site in April 2019.

In May, he said he would not give management rights to his children and apologized for the behavior of executives caught sabotaging union activities.

"A real super-class company is a sustainable company … I want to build a new Samsung," Lee said during his closing statement in court in December.

($ 1 = 1,094.8900 won)

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