Who takes the helm?Heads of five major business organizations, including Sohn Kyung-shik, chairman of the Korea Employers Federation, formally petitioned to the government last Friday for a presidential pardoning of Samsung Electronics Vice Chairman Lee Jae-yong. During a meeting with Deputy Prime Minister for Economic Affairs and Finance Minister Hong Nam-ki, Sohn on behalf of business chiefs argued for Lee’s return to management for a preemptive response to the intensifying semiconductor competition and bold investment for next-gen technology as chip investment should be made four to five years ahead.
The campaign for Lee’s pardon and release comes amid rapid changes in the global semiconductor industry from tech conflict between the United States and China. U.S. President Joe Biden rounded up 19 global companies involved in chip supply, including Samsung Electronics, for a videoconference with the White House. While pitching for increased investment in the U.S., Biden’s real message was a strengthened U.S.-led chip value chain against China’s ascension.
America took a similar offensive 30 years ago when Japan outpaced it in memory chip production. The U.S. forced Japan into a bilateral chip agreement to contain the country’s chipmaking capacity and price competitiveness, leading to a downfall in Japan’s semiconductor industry.
Biden is calling for the creation of a new global value chain to keep China at bay. But Korea runs chip facilities in China and cannot neglect its market. Intel and TSMC have announced their investment plans in the U.S. following the White House-led videoconference. Samsung Electronics would have to come up with an outline before President Moon Jae-in holds a summit with Biden in May.
Samsung Electronics is mulling a $1.7 billion project to build the second foundry in the U.S. But the decision has been stalled due to leadership vacuum. Lee in January returned to the prison after the Supreme Court upheld a lower court’s earlier ruling, placing him behind bars until July 2022. He has not been able to accept visitors except his lawyers. A visit at the prison is restricted to 10 minutes and the conversation is taped.
Lee can hardly give orders involving multi-billion dollar projects under such circumstances. The government must pay heed to the petition from the business community before it is too late.