Samsung hopes China will help soften crisis
Samsung Electronics is preparing to make China the new center of its activities, hoping that a strengthened position in the world’s fastest-growing economy will provide a cushion to absorb business rockiness in shell-shocked nations in the West.
To explore new business opportunities Choi Gee-sung, the former Samsung Electronics CEO who was recently promoted to overall strategy chief of Samsung Group, accompanied chief operating officer (COO) Lee Jay-yong, the son and heir apparent to Chairman Lee Kun-hee, on a trip to China.
Although company officials declined to reveal details of the visit, the two met and talked with Chinese Vice Premier Li Keqiang. A company insider told The Korea Times that the Samsung executives hoped to talk about strengthening investment in China, including bulking up a semiconductor plant currently in the works in Xian.
Also among topics is the state-of-the-art liquid crystal display (LCD) line in Suzhou that Samsung is building as Chang Won-kie, an executive with a wealth of experience in LCD also traveled with them.
``Market conditions certainly make it a tough time to increase our investment in the semiconductor plant. But that could be the price we need to pay as it would be important to maintain a good relationship with the Chinese government as how we do in that country just might define our future,’’ said the Samsung source.
``Chips and LCDs remain Samsung Electronics’ major cash cows and the visit to China reflects the company’s willingness to spend more to add muscle to its parts business.’’
Boasting dual strength in parts and finished products, the company is the world’s biggest maker of flat-screen televisions, mobile phones and computer memory chips and trails only LG Display in LCDs by a narrow margin.
China surpassed the United States earlier this year as the world’s biggest market for LCD televisions. The country is also home to a number of up-and-coming companies in consumer electronics and mobile phones, with Huawei and ZTE among the companies gaining international recognition. A slew of technology companies including IBM, Cisco, Apple and Hewlett-Packard (HP) have accordingly been accelerating activities in China in recent years.
During his meeting with Samsung executives, Li stressed that Beijing is encouraging foreign companies to invest more in the country's central and western regions. The Shaanxi regional government had earlier promised Samsung Electronics various incentives and administrative support for the planned Xian factory.