Court Rejects Arrest Warrant for Lee Jae-yong
Risks surrounding Samsung Electronics vice chairman Lee Jae-yong are affecting the company’s position in the global semiconductor industry. The prosecution recently requested an arrest warrant for him regarding the merger between Samsung C&T and Cheil Industries and his management succession. The request, however, was rejected by a Seoul court on June 9.
In the meantime, TSMC, the largest foundry in the world, recently decided to invest US$10 billion to build new facilities in Taiwan. Earlier, TSMC announced that it would build a 5-nm foundry in Arizona by investing US$12 billion.
TSMC’s aggressive investment is intended to keep Samsung Electronics in check. Samsung Electronics announced on May 21 that it would build EUV foundry production lines in Pyeongtaek by investing 10 trillion won. At present, TSMC and Samsung Electronics are the only two companies in the industry that are capable of manufacturing 7-nm and more advanced products. Samsung Electronics is aiming to dominate the global system-on-chip market from 2030 and it needs to catch up with TSMC in order to do so.
SMIC, in the meantime, is planning to procure 20 billion yuan by going public in Shanghai. A fund led by the Chinese government is scheduled to invest US$2.25 billion in the largest foundry in China. Samsung Electronics is caught in the middle between TSMC and SMIC and the prosecution’s investigation, the COVID-19 pandemic, U.S.-China trade disputes and diplomatic disputes between South Korea and Japan are compounding the matter with the role of the vice chairman becoming more important than ever.