Despite virus, Samsung Electronics remains upbeat on chip outlook

Kim Ki-nam, vice chairman and CEO of Samsung Electronics' device solutions division, speaks during the company's annual general meeting in Suwon, Wednesday. / AP-Yonhap

By Baek Byung-yeul

Samsung Electronics forecasted the demand for semiconductors will grow, driven by the growth of artificial intelligence (AI) technology and increased investment in data centers despite the ongoing uncertainties raised by the coronavirus outbreak, Kim Ki-nam, vice chairman of the tech giant, said Wednesday.

“The external uncertainties are expected to continue this year, the demand for semiconductors is forecasted to grow on the back of the growth of AI technology and automotive semiconductor industries, increased investment from data center companies and expansion of fifth-generation (5G) networks,” Kim said during the company's 51st general shareholders' meeting in Suwon, just south of Seoul.

Kim added the memory chip market will be stabilized compared with last year when the entire chip industry struggled with falling demand and decreased prices.

“Despite the poor market situation in the memory chip industry, we can post a solid performance thanks to the technology competitiveness as a leading company. We are solidifying our technological capability by developing third-generation 10-nanometer DRAM and sixth-generation V-NAND chips,” Kim said.

At the meeting, shareholders voted to add two new directors ― Han Jong-hee, president of the visual display business, and chief financial officer Choi Yoon-ho.

Staff wearing face masks wait for shareholders of Samsung Electronics during the company's annual general meeting in Suwon, Wednesday. / AP-Yonhap

The tech giant prepared its shareholders' meeting such to prevent the spread of the virus during the meeting. The company said about 400 shareholders attended the meeting, down about 1,000 from last year's meeting.

Samsung chose the Suwon Convention Center as a meeting venue, which has around 2,000 seats to accommodate more shareholders.

The decision to hold the meeting outside of its corporate building for the first time was made to avoid congestion the company experienced last year. Samsung Electronics has more than 610,000 shareholders.

For the safety of its shareholders, the company ran disinfected shuttle buses from Gwanggyo Jungang subway station to the convention center before the meeting. The company also prepared seven thermal imaging cameras and 16 contactless thermometers.

It also brought three doctors and seven nurses as well as four ambulances. When receiving shareholders, the company distributed facial masks and hand sanitizers to every attendee. Samsung also rearranged seating in the conference room, with spaces between seats.

Other Samsung Group affiliates also held their shareholders' meetings. Samsung SDS, an IT affiliate of Samsung Group, vowed during its shareholder meeting to expand into overseas markets, held at its headquarters in Songpa-gu, southern Seoul.

“To expand overseas business this year, we have set our business vision as 'securing growth engine through global business,'” Samsung SDS CEO Hong Won-pyo said. Since last year, Samsung SDS has strengthened its capability for global business by expanding its number of IT centers in India, Vietnam and China.

The company also made further investments in foreign companies in an effort to secure core technologies to improve its competitiveness. Last year, the company invested in Israeli startup Iguazio, specialized in providing server-less computing services; U.S. security company SentinelOne; and Jitterbit, another U.S. company that connects cloud computing services to application programs.

Samsung Electro-Mechanics, an electronics component-making arm of Samsung Group, approved the extension of the term of its external director Yoo Ji-beom during its meeting.

Yoo received negative votes from the National Pension Service, the second-largest shareholder with 11.22 percent, because he has served as a professor of the Advanced Materials Science and Engineering Department at the Sungkyunkwan University, which has a strategic alliance with Samsung Group.

“As a professor specialized in advanced material research, Yoo has shown great insight into how the company should develop its business plan,” a Samsung Electro-Mechanics official said.

Samsung SDI, a battery-making affiliate, reelected its CEO Jun Young-hyun to its Board of Directors during its shareholders' meeting held at the K Hotel Seoul.

“We are expecting to have a tough time due to the outbreak of the coronavirus, but we will keep trying to develop new products and new growth engines based on our strong executive ability,” Jun said during the meeting.