Jay Y. Lee’s release card from prison is Samsung’s next chapter. The early departure of his de facto boss increases the pressure to use his huge treasury to make major investments.
Lee’s parole represents a major setback for corporate governance reformers in South Korea. The 53-year-old accused had served less than two-thirds of his 30-month sentence – now reduced from five years – for bribery, embezzlement and other charges. Defenders of his early release, including trade lobbyists and the local division of the US Chamber of Commerce, said the tech company couldn’t make major investments and acquisitions with its main liability behind bars. The authorities relented, referring to Lee’s good behavior and the country’s economy affected by the epidemic.
Pressure is mounting on Samsung to use its treasury, which in June was about $82 billion net. The memory chip-dominant company has admitted the scandal is limited. With nationals SK Hynix and Hyundai moving forward, as well as global peers like TSMC and Intel, Samsung has lagged behind in areas such as contract chip manufacturing, autonomous cars, 5G, and biotechnology.
Lee will probably focus on memory-free chips. It is considering plans to install $17 billion in the United States. The global shortage of chips has also fueled speculation that Samsung will consider a bid for the $58,000 million Dutch NXP semiconductor (automotive chips) listed in New York.
Any enthusiasm for a deal always involves the risk of overpaying. It will also be difficult to placate governments and competition authorities, who are increasingly wary of focusing on chips. The UK is concerned about the national security implications of Nvidia’s purchase of Arm. Lee has a high hurdle to rise to.
The authors are columnists for Reuters. opinions are yours. Translation Carlos Gomez DownIt’s a responsibility five days
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