Samsung supports gov't as Korea shifts to 'Living with COVID-19'

The Korea Times

The Korea Times

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Sun, October 1, 2023 | 06:47

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Samsung supports gov't as Korea shifts to 'Living with COVID-19'

Posted : 2021-10-26 15:58

Updated : 2021-10-26 20:29

Samsung chief Lee Jae-yong

By Kim Yoo-chul

When the justice ministry decided to parole Samsung Vice Chairman Lee Jae-yong, local politicians and senior government officials were expecting an expanded role for the Samsung leader in striking COVID-19 vaccine supply deals with the United States.

Justice Minister Park Beom-kye told reporters that his ministry decided to parole Lee because of mounting concerns over the country's economic situation. Later, Cheong Wa Dae said that it had decided to parole him despite criticism, due to growing calls from the public for Samsung to play a role in addressing semiconductor and vaccine shortage issues.

Since his release from prison, Lee has been maintaining a low profile and refrained from commenting on issues facing Samsung. But as it has been a year since his father Samsung Chairman Lee Kun-hee's death and with Seoul's planned shift to a "Living with COVID-19" scheme from Nov. 1, the health ministry has granted emergency approval for the use of Moderna's coronavirus vaccine, manufactured by Samsung Biologics at its manufacturing plant in Songdo, west of Seoul.

Some 2.44 million doses of the shots are already being stored at Samsung Biologics' warehouse in Korea.

"The domestic use of Moderna's COVID-19 vaccines cost a lot for Samsung Biologics, because the initial contract signed by the two firms had called for Samsung Biologics to distribute the Moderna vaccines in Asia and not in South Korea. But as a support measure for the country's efforts to kick off the 'Living with COVID-19' initiative as scheduled, Samsung's top management reached a consensus to cover any costs related to the domestic use of Moderna's COVID-19 vaccines," a senior industry executive told The Korea Times, Tuesday.

In May, U.S. President Joe Biden said that he and President Moon Jae-in had agreed on forming a comprehensive partnership for COVID-19 vaccines. Following that agreement, Samsung reached a "fill and finish" deal with Moderna. Samsung's assigned task is to put vaccines into vials, as well as seal and package them for shipping. The deal does not allow Samsung to produce the Moderna vaccine.

Regarding the specific role that Lee played behind the scenes, Samsung representatives declined to comment. The country has reached its earlier goal of fully vaccinating over 70 percent of its population, which was a key prerequisite for the government to ease social distancing measures.

"In order to ensure the stable working of the semiconductor supply chain, the United States can't rely on Taiwan's TSMC. Given lots of variables, such as Samsung's planned semiconductor investment in Texas, it's fair to say that semiconductors seemed to have made contributions in terms of helping Samsung gain an upper hand in vaccine talks," Lee Seung-woo, the chief of research at Eugene Investment, said.

Lee will soon fly to the United States to finalize major investment decisions that had been pending while he was in prison for being found guilty of bribing former President Park Geun-hye. Sources say that Lee's itinerary includes a meeting with Moderna's CEO and discussions on how further to develop business ties between the two companies. Samsung Biologics was hoping to obtain COVID-19 vaccine production know-how from Moderna, while the U.S. drug maker is apparently unwilling to accept such an arrangement due to intellectual property rights.

yckim@koreatimes.co.kr