Fueling Concern over Outflow of Semiconductor Human Resources
A former CEO of Samsung Electronics who once ran the company’s’ Chinese operations has moved to a Chinese semiconductor company, causing concern about an outflow of the Korean semiconductor industry’s high-quality human resources.
According to news reports, former Samsung president Jang Won-gi was recruited early 2020 as vice chairman of Eswin Technology in China. Eswin is a display driver IC (DDI) manufacturer with close ties to BOE, one of China's top display makers.
Industry watchers say BOE might use Eswin to get into the IC production industry to enhance its competitiveness in the display panel market.
Jang had worked as an advisor for Samsung Electronics for two years after his retirement in 2017. Electronics companies restrict high-ranking executives from getting jobs at competitor companies for about two years after retirement, but Jang is free from such restriction as he retired in 2017.
Eswin was founded in 2016 by Wang Dongsheng who had founded BOE, China's largest display company, and produces semiconductors for displays such as DDIs for organic light-emitting diodes (OLEDs). Samsung Electronics controls more than 60 percent of the global market for DDIs for OLEDs. Most display companies use DDIs from Korean companies such as Samsung Electronics and supply panels to smartphone manufacturers.
If Eswin strengthens its competitive edge in DDIs for OLEDs and supplies them to Chinese companies such as Huawei, Oppo, and Vivo, it will inevitably deal a big blow to Korean companies such as Samsung Electronics. Following the recruitment of Jang, Eswin has recently raised 2.1 billion yuan (about 350 billion won) in investment funds to expand its market share.
Although Jang is classified as an LCD specialist as he served as a LCD business manager, industry insiders say that he has considerable know-how in semiconductors. Jang joined Samsung Electronics in 1981 and worked for the semiconductor division for about 10 years. In 2011, he was appointed as head of Samsung China. Jang is expected to display his capabilities in deploying human resources and various kinds of equipment after installing clean rooms, which is the first step in setting up semiconductor facilities.
Semiconductor industry observers are concerned that China would drive momentum for growth of its semiconductor industry based on Korean human resources. Jang’s move to a Chinese company is expected to encourage Chinese semiconductor companies to make more aggressive efforts to recruit Korean human resources. "When Lee Sang-chul, a former vice chairman of LG Uplus moved to Huawei three years ago, concerns were expressed over a leak of know-how from the Korean telecommunications industry, but Jang's latest move will have a bigger impact than Lee’s case," said a semiconductor industry insider. "Many experts forecast that China will chase Korean semiconductor companies starting with general-purpose semiconductors for low-priced products. Jang’s transfer to the Chinese company worries Korean chipmakers a great deal."