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- Korean Air and Asiana Airlines Merger Nears Completion, Cho Won-tae’s "Mega Carrier" Strategy in the Spotlight
- Cho Won-tae, Chairman of Hanjin Group, is on the verge of achieving his long-standing goal of merging Korean Air and Asiana Airlines.
With the final hurdle, the U.S. Department of Justice's (DOJ) review of the merger, expected to conclude soon, Korean Air is preparing to fully launch the merger process.
Since initiating the Asiana Airlines merger in 2020, Cho has faced numerous challenges, but the day when the company takes flight as a top 10 global "mega carrier" is now within reach.
According to sources in the aviation industry on the 9th, the DOJ’s review of the Korean Air and Asiana Airlines merger could be completed as early as this month.
In the U.S., the DOJ oversees merger reviews. If the DOJ does not file a lawsuit related to the merger, it is considered approved. Although the final outcome remains uncertain, there is optimism within the industry that the DOJ will approve the merger, as many competition concerns have been addressed through reviews by authorities in other countries. Korean Air has also put significant effort into persuading the U.S. on various fronts.
Many expect that Korean Air’s close relationship with Delta Air Lines will also positively influence the process. Since the merger aligns with the interests of U.S. airlines, there is little reason for the U.S. government to block it.
Korean Air has formed a joint venture with Delta, one of the U.S.’s leading airlines, representing the highest level of collaboration.
Delta Air Lines CEO Edward Bastian recently met with Incheon International Airport Corporation President Lee Hak-jae and commented that the "merger between Korean Air and Asiana Airlines is a great opportunity" and would "greatly benefit both Korean Air and Delta."
Korean Air is also a significant customer of Boeing, the U.S.-based aircraft manufacturer. In July, Chairman Cho signed a memorandum of understanding to purchase a total of 50 aircraft, including 20 Boeing 777-9s and 30 Boeing 787-10s (with an option for 10 more) at Farnborough Airport in Hampshire, UK.
Korean Air is also expected to soon receive final approval from the European Union’s (EU) competition authority, the European Commission (EC). The EC had initially given conditional approval for the merger, requiring Korean Air to address monopoly concerns.
To meet these conditions, Korean Air has transferred some of its European routes to T'way Air and is in the final stages of selling Asiana Airlines’ cargo business to Air Incheon.
In a June interview with Bloomberg, Cho expressed confidence, stating that he expected approval from the U.S. for the Asiana Airlines merger by the end of October.
The Asiana merger is Cho’s most significant long-term ambition.
Cho Won-tae, Chairman of Hanjin Group, received the 2024 Korea CEO of the Year Award at the 39th Annual Summer Convergence Conference held in Gyeongju on the 813th day. Cho is seen delivering his acceptance speech.
While pursuing the merger, Cho promised KDB Development Bank that if the merger failed to deliver strong post-merger performance, he and his family would step down from their leadership roles in the aviation business. To guarantee this promise, he put up his entire personal stake in Hanjin KAL, the holding company of Hanjin Group, as collateral with KDB.
This demonstrates Cho’s strong determination to transform the company into a global mega carrier.
In May last year, when reports surfaced that the DOJ was considering a lawsuit to block the merger, Cho personally met with the DOJ’s Deputy Attorney General to persuade the department.
Once the merger is finalized, Cho is expected to focus on streamlining operations.
Since Korean Air and Asiana Airlines operate different aircraft models, there will be a need to simplify their fleet to avoid higher maintenance and operational costs that come with a diverse range of aircraft.
In addition, the company will need to reorganize overlapping routes and develop new routes tailored to each airline's strengths.
It will also be crucial to blend the two companies' different organizational cultures and merge them into a unified team.
While there is widespread optimism about the DOJ’s approval of the merger, there remains a slight chance that the department could raise objections.
The DOJ has a precedent of challenging mergers, such as in 2013 when it filed a lawsuit against the merger of American Airlines and US Airways. However, the lawsuit was dropped after American Airlines agreed to give up 104 slots at Washington Reagan Airport and 34 slots at New York LaGuardia Airport, leading to the merger’s approval.
An industry insider stated, “Given Korean Air’s strong efforts to persuade the U.S. authorities and its robust network with the U.S. aviation industry, it seems there won’t be significant issues in obtaining merger approval in the U.S.”
#KoreanAir #AsianaAirlines #ChoWontae #merger #aviationindustry #globalaviation #DOJapproval #DeltaAirLines #Boeing #megacarrier #HanjinGroup #marketexpansion
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- Shinsegae Hwaseong International Theme Park Nears Unveiling: Will Universal, Disney, or Netflix Be Included?
- There is growing interest in which intellectual property (IP) will be featured in the amusement park of the Hwaseong International Theme Park, which Shinsegae Group is ambitiously preparing as the largest of its kind in Korea.
Since Shinsegae Group and Hwaseong City have been working to attract foreign IPs, there is high anticipation for major IPs like Disneyland or Universal Studios.
On the 8th, industry experts in the distribution sector suggested that the success or failure of the massive project might depend on which IP is chosen for the park within Hwaseong International Theme Park.
The name value of the amusement park to be built in Hwaseong International Theme Park is considered a crucial issue for Shinsegae Group. A total of KRW 4.57 trillion (US$ 3.29 billion) will be invested in the development of the park, making it the largest project in Shinsegae Group’s history. This is also seen as the ambitious endeavor of Shinsegae Group Chairman Chung Yong-jin.
With an investment of more than KRW 4 trillion, the challenge is to generate substantial long-term profits, and the amusement park, which will take up about 30% of the total area of approximately 4.2 million square meters (1.27 million pyeong), will inevitably play a critical role.
The Hwaseong International Theme Park will feature an amusement park, Starfield, hotels, a premium outlet mall, and a golf course. Among these, the amusement park is expected to attract the most attention and the largest crowds. The park will span 1.26 million square meters (approximately 380,000 pyeong), making it 1.5 times the size of Everland in Yongin, Gyeonggi Province.
If the IP chosen for the park fails to meet public expectations, the KRW 4.57 trillion investment could become a long-term burden for Shinsegae Group. This highlights the need to attract an IP that goes beyond simply being better than Everland.
On October 10th, Hwaseong City will host a global IP attraction announcement ceremony for Hwaseong International Theme Park at Hwaseong City Hall. Attendees will include Lim Young-rok, CEO of Shinsegae Property and President of Shinsegae Group’s Strategic Planning Office, Hwaseong Mayor Jeong Myeong-geun, and Gyeonggi Province Governor Kim Dong-yeon.
Recently, there has been rising speculation about the potential attraction of "Netflix House."
The online video streaming service (OTT) Netflix is currently constructing Netflix Houses, aiming to open them in 2025 in Pennsylvania and Texas in the United States.
According to Netflix, visitors will be able to walk across the glass bridge from "Squid Game" and experience the sets of popular series like "Money Heist," "Stranger Things," and "Bridgerton."
The possibility of Netflix House being featured in the park is gaining attention due to Netflix’s recent activities in Korea.
From September 6 to November 17, Netflix is operating a themed experience zone at Everland, featuring "All of Us Are Dead" and "Stranger Things." While Netflix has previously run pop-up stores for its new series, this is the first time it has launched such a large-scale outdoor experience zone.
Some analysts cautiously suggest that Netflix may be using the Everland experience zone to evaluate the synergy between Netflix and an amusement park.
The success of Netflix original series such as Kingdom, Squid Game, The Glory, and All of Us Are Dead worldwide further strengthens the possibility of Netflix House being featured in the park.
Public expectations are highest for Disneyland and Universal Studios.
Universal Studios has been a candidate for the site since 2007, when the development of Songsan Green City, where Hwaseong International Theme Park is located, was first decided. In fact, former president Park Geun-hye even used the attraction of Universal Studios as a campaign pledge during the 2012 presidential election. However, the plan fell through due to the global financial crisis and the impeachment of the president.
Due to several previous failures, many expect that attracting Universal Studios will not be easy. Additionally, the fact that Universal Studios already operates in Japan, Singapore, and China is another reason why its attraction is considered unlikely.
If Universal Studios were to open in Korea, it would inevitably lead to a dispersion of visitors from the existing Universal Studios locations. A key question is how much profitability Universal Studios expects from a Korean site.
As for Disneyland, many experts believe the chances are low, as Disney has been fully owning its new parks in recent years.
Disney would likely not want to share ownership with Shinsegae Group, and from Shinsegae's perspective, it would be a loss not to hold any stake in a project involving vast land and significant capital investment. The fact that Disneyland already exists in Tokyo, Hong Kong, and Shanghai is another obstacle.
An industry insider commented, “There’s speculation within the industry that if a major IP had been secured, Chairman Chung Yong-jin would have personally attended the event. Although there’s still a chance that Chairman Chung might make a surprise appearance to announce the attraction of a major IP, his name is not on the official attendee list.”
#Shinsegae #HwaseongInternationalThemePark #NetflixHouse #UniversalStudios #Disneyland #ChungYongjin #amusementpark #themepark #Everland #investment
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- Samsung Semiconductor Leadership Shakeup Looms, Lee Jung-bae, Choi Si-young, Park Yong-in Under Fire
- As concerns rise over the declining competitiveness of Samsung Electronics' semiconductor (DS) division, there are growing expectations that a major leadership shakeup will take place by the end of the year, with senior executives potentially held accountable.
Attention is focused on the futures of key DS division leaders, including Lee Jung-bae, head of the Memory Business, Choi Si-young, head of the Foundry Business, and Park Yong-in, head of the System LSI Business.
According to industry sources on October 8, Samsung Electronics Chairman Lee Jae-yong may introduce significant changes to the core executive team during this year’s year-end reshuffle, contrasting with the relatively stable executive appointments in November 2023. Last year, the company focused on stability, promoting only two executives and changing the responsibilities of three others.
However, in May 2024, Samsung made a surprising "one-point" appointment, naming Vice Chairman Jeon Young-hyun as head of the DS division, signaling the beginning of changes, particularly in the semiconductor business.
Currently, Samsung's DS division is struggling to maintain technological leadership in its three main areas: memory, foundry (contract manufacturing), and system LSI (semiconductor design). Even in memory semiconductors, a traditional strength for Samsung, the company has fallen behind in developing high-bandwidth memory (HBM), widening the technology gap with competitors.
Samsung is also facing difficulties in improving the yield rate (the ratio of fully functional products) for DRAM chips produced using its 6th-generation 1c (11-12nm) fine process, lagging behind competitors. The Memory Business is estimated to have earned around KRW 6 trillion (US$ 4.33 billion) in operating profit in Q3 2024, which falls short of SK Hynix’s estimated KRW 6.7 trillion (US$ 4.84 billion) for the same period.
The System LSI Business and the Foundry Business, responsible for contract manufacturing and semiconductor design, posted an operating loss of KRW 2.949 trillion (US$ 2.13 billion) in 2023 and are estimated to have incurred losses exceeding KRW 2 trillion in the first three quarters of 2024. The Foundry Business, in particular, has faced ongoing losses and failed to secure major customers, leading to suggestions that it may need to be spun off.
The gap between Samsung’s foundry business and its main competitor, Taiwan’s TSMC, continues to widen. According to TrendForce, TSMC held a 62.3% share of the global foundry market in Q2 2024, with Samsung trailing far behind at 11.5%, a difference of 50.8 percentage points.
Due to these challenges, Samsung's DS division is expected to record Q4 2024 operating profits of around KRW 6 trillion, down from KRW 6.5 trillion in Q2.
Internally, there are calls for accountability, with criticisms emerging that the DS division heads should bear responsibility for the underperformance, especially following the leadership change in May.
Vice Chairman Jeon Young-hyun issued a rare public apology following the release of Q3 earnings guidance, stating, "We failed to meet market expectations and caused concern regarding our fundamental technological competitiveness and the company’s future. Many people are speaking of Samsung's crisis. We, who are leading the business, take full responsibility."
The heads of the DS division are currently in their third or fourth year of leadership. Lee Jung-bae and Choi Si-young have both led the Memory and Foundry businesses for nearly four years, while Park Yong-in is approaching his third year as head of the System LSI Business.
Given that key executives at Samsung Electronics are generally reviewed every three years, a leadership shakeup in the DS division at the end of the year appears likely.
With the semiconductor division in urgent need of reform, a significant reshuffling of senior executives is expected, in contrast to last year’s more stable appointments.
A business insider commented, "Within Samsung, there is a growing consensus that those responsible for poor performance should be held accountable, while those who have performed well should be rewarded. While nothing is certain until the announcements are made, many expect a major restructuring of the leadership team."
Chairman Lee Jae-yong is reportedly deeply concerned about the overall challenges facing the semiconductor business.
Some critics argue that Samsung spread itself too thin by expanding into foundry and system LSI, diverting critical resources like manpower and funding, which ultimately weakened its once-dominant position in memory semiconductors.
In response to these challenges, there have been calls from both industry and academia for Samsung to scale down or spin off its foundry and system LSI businesses to focus on memory semiconductors, where it historically held a competitive edge. Recently, Samsung reassigned some of its System LSI development staff to the Memory Business, signaling internal shifts.
However, in an interview with Reuters on October 7, Lee Jae-yong dismissed the possibility of spinning off the foundry and system LSI businesses, stating, "We have no interest in spinning them off. We are eager to grow these businesses."
This response indicates that Samsung plans to retain its foundry and system LSI businesses, aiming for a turnaround through significant reforms.
#Samsung #semiconductors #DSdivision #LeeJaeYong #leadershipshakeup #foundry #memorysemiconductors #SystemLSI #TSMC #JeonYoungHyun #businessreform #SouthKorea #semiconductorindustry
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- Samsung's Jun Young-hyun: "Fell Short of Expectations, Will Restore Competitiveness"
- Jun Young-hyun, Vice Chairman and Head of the Device Solutions (DS) Division at Samsung Electronics, issued a public apology on October 8 to customers, investors, and employees, acknowledging concerns over the company’s recent underperformance.
He stated, “We have fallen short of market expectations, raising worries about our core technological competitiveness and the future of the company. All responsibility lies with us who lead the business.”
Jun also expressed his determination to overcome the current challenges, emphasizing that Samsung must restore its "fundamental technological competitiveness," which he described as the company’s "non-negotiable pride."
He added, “Developing groundbreaking new technologies and achieving perfect quality competitiveness is the only path for Samsung’s resurgence.”
In his message, Jun pledged to reignite the passion that once defined Samsung, stating, “We will reignite our unique drive to fearlessly pioneer the future and relentlessly pursue our goals until they are achieved.”
He also highlighted the need for improving Samsung’s organizational culture, promising to review and address any issues in the way the company operates. “We will identify problems in the field and address them through intense debate and improvement.”
On the same day, Samsung Electronics announced its preliminary financial results for Q3 2024, with sales of KRW 79 trillion (US$ 56.98 billion) and operating profit of KRW 9.1 trillion (US$ 6.57 billion).
Compared to Q3 2023, sales increased by 17.21%, and operating profit surged by 274.49%. However, compared to the previous quarter, sales rose by 6.66%, while operating profit declined by 12.84%.
While sales reached an all-time high, the operating profit fell short of the market consensus, which had projected KRW 10.44 trillion (US$ 7.53 billion).
The lower-than-expected profit is attributed to a decline in semiconductor shipments, particularly in DRAM and NAND flash, due to sluggish demand for IT products like smartphones and PCs. Additionally, the sales of high-value products like high-bandwidth memory (HBM) remained limited compared to competitors.
The DS division is estimated to have generated approximately KRW 5 trillion (US$ 3.61 billion) in operating profit in Q3, down KRW 1.5 trillion (US$ 1.08 billion) from the previous quarter. While the memory semiconductor business posted an estimated KRW 6 trillion (US$ 4.33 billion) in operating profit, the foundry and System LSI divisions likely incurred around KRW 1 trillion (US$ 722 million) in losses.
Due to rising component costs, the Mobile Experience (MX) division’s operating profit is estimated to have been around KRW 2.5 trillion (US$ 1.8 billion).
#SamsungElectronics #JunYoungHyun #apology #semiconductor #financialresults #DSdivision #operatingprofit #technologicalcompetitiveness #HBM #memorysemiconductor #MXdivision
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- Woori Financial Group Chairman Yim Jong-yong Faces National Assembly Audit Head-on
- Woori Financial Group Chairman Yim Jong-yong is expected to appear as a witness at the upcoming National Assembly audit.
This will be the first time a head of a major financial group has participated in an audit by the National Policy Committee. Yim, a former high-ranking official who previously served as Chairman of the Financial Services Commission, is familiar with National Assembly audits.
Given the growing scandal involving improper loans by relatives of the former chairman, Yim appears to have chosen to face the audit head-on. With political circles scrutinizing Woori Financial as much as the financial authorities, it is anticipated that Yim’s position will also be a subject of discussion during the audit.
According to Woori Financial on the 7th, Yim is expected to attend the National Policy Committee’s Financial Services Commission audit as a witness on the 10th.
As per National Assembly regulations, if Yim chooses not to attend, he must submit a letter explaining his absence by the 7th, three days before the audit.
It is believed that Yim’s decision to attend is aimed at regaining public trust in Woori Financial by adopting a humble approach.
This will be the first time the head of a major financial group has appeared as a witness at a National Policy Committee audit related to financial institutions. Apart from NH Nonghyup Financial Group chairmen, who were summoned by the Agriculture, Food, Rural Affairs, Oceans, and Fisheries Committee, none of the heads of Korea’s four major financial groups (KB, Shinhan, Hana, Woori) have appeared as witnesses in an audit.
The difficult situation surrounding Woori Financial seems to have prompted Yim’s decision.
Starting the same day, the Financial Supervisory Service (FSS) will begin its regular inspection of Woori Financial and Woori Bank. Although labeled a "regular" inspection, it has been moved forward by about a year due to a series of financial accidents at Woori, making the audit particularly significant.
Yim is also facing pressure due to Woori Financial’s ongoing pursuit of acquiring Tongyang Life Insurance and ABL Life Insurance, which requires approval from financial authorities.
In early September, FSS Governor Lee Bok-hyun criticized Woori Financial, stating that the company should have consulted the authorities regarding the risks related to the life insurance acquisitions but failed to communicate. He added that the FSS would closely examine Woori’s asset expansion during the audit.
If the FSS identifies deficiencies in internal controls and Woori receives a rating of three or lower in its management evaluation, it may be restricted from investing in subsidiaries, which could jeopardize its life insurance acquisitions.
The importance of internal control in management evaluations has significantly increased, with its weighting rising from 5.3% to 15% since December last year, following revisions to banking supervision regulations by the Financial Services Commission.
Industry insiders expect lawmakers on the National Policy Committee to press Yim on his future, especially given that Woori Bank has disclosed three financial accidents this year, including the improper loan scandal involving relatives of former Chairman Sohn Tae-seung. The increasing pressure could lead to discussions about Yim’s position.
After the improper loan scandal came to light, Yim adopted a low-profile approach, stating that he would humbly follow any decisions or actions resulting from investigations.
As a former senior government official, Yim is no stranger to National Assembly audits, having appeared at many during his tenure as Chairman of the Financial Services Commission, Director of the Office for Government Policy Coordination, and 1st Vice Minister of Strategy and Finance.
This is also not Yim’s first appearance as a financial group chairman. He previously appeared at National Assembly audits in 2013 and 2014 during his time as Chairman of NH Nonghyup Financial Group.
#WooriFinancialGroup #YimJongyong #NationalAssemblyAudit #financialcontroversy #improperloans #financialregulation #internalcontrols #Koreanfinancialsector #leadershipscrutiny #NationalPolicyCommittee
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- KT's Kim Young-shub Summoned to National Assembly Audit, Heightened Tensions
- KT CEO Kim Young-shub will appear before the National Assembly’s audit to address the ongoing controversies surrounding KT, including the change in its largest shareholder and allegations of distributing malware disguised as a P2P (peer-to-peer) "grid program."
It is expected that Kim will choose to confront these issues head-on to prevent further escalation of the various suspicions surrounding the company.
According to the National Assembly on the 7th, Kim is the only CEO among the three major telecom companies who will be summoned as a witness for the upcoming audit by the National Assembly’s Science, ICT, Broadcasting, and Communications Committee (SICTBC) on the 8th.
A total of seven SICTBC lawmakers, including Kim Hyun of the Democratic Party, requested Kim’s appearance to question him about the change in KT's largest shareholder and the public interest review process associated with it.
It has been four years since a telecom company CEO was summoned as a witness in an SICTBC audit.
This will mark Kim’s first National Assembly appearance in two years, having last been summoned as CEO of LG CNS in 2022, where he apologized to the National Assembly’s Health and Welfare Committee for the failure in establishing the ‘Next-Generation Social Security Information System.’
A source in the telecommunications industry noted, “While SK Telecom and LG Uplus have senior executives at the vice president level summoned as witnesses, KT is the only company where the CEO has been called, creating significant tension within the company.”
Recently, KT has seen significant changes in its corporate governance as Hyundai Motor Group has emerged as the largest shareholder.
Due to the National Pension Service reducing its stake in KT, as of June this year, Hyundai Motor and Hyundai Mobis have together become the largest shareholders, holding 4.86% and 3.21% stakes, respectively, for a total of 8.07%. Hyundai Motor Group has also passed the public interest review by the Ministry of Science and ICT.
However, some have expressed concerns that this shift might compromise the public nature of the telecommunications industry.
In a joint statement, the KT New Union and the People's Solidarity for Participatory Democracy voiced their worries: “We are deeply concerned that the public interest review by the Ministry of Science and ICT on the change in KT’s largest shareholder may have been rushed. Moreover, there are serious doubts whether the public interest has been adequately discussed in this process.”
They added, “There are also concerns that KT’s involvement in non-telecom industries, under the guise of telecom and automotive industry convergence, may lead to an unfair burden being passed on to consumers through high telecommunications fees.”
Furthermore, questions have been raised about whether the Ministry of Science and ICT’s public interest review process was conducted appropriately. Democratic Party lawmakers on the SICTBC are expected to question Kim in detail about the potential impact of the shareholder change on the telecommunications industry.
Kim is also scheduled to appear as a witness for the Industry, Trade, and Energy Committee’s audit on the 14th.
The focus of this audit will be the sixth project for Korea Electric Power Corporation’s (KEPCO) Advanced Metering Infrastructure (AMI). In May of this year, KT was selected as the final contractor for the sixth AMI project, securing 1.1 million IoT (Internet of Things) lines.
KEPCO’s AMI is a system that connects communication networks to electricity meters, enabling the collection of data on electricity usage and time-based billing information. The system has been gradually implemented since 2010.
However, Kang Seung-kyu, a lawmaker from the People’s Power Party on the Industry, Trade, and Energy Committee, raised concerns about whether KT has the capacity and reliability to handle such a large-scale public project.
Additionally, KT has been under police investigation for the past four years, facing accusations that it distributed malware to users’ personal computers to block P2P grid programs, causing network disruptions.
KT has defended its actions, stating that the measures were legally permissible actions that Internet Service Providers (ISPs) can take to ensure smooth network services. However, Kim has yet to make any direct remarks regarding these allegations.
Apart from these issues, Kim is expected to also address topics such as lowering household telecom fees and the potential repeal of the "Handset Distribution Act" (which aims to improve the distribution structure of mobile communication devices).
There may also be questions regarding allegations that telecom companies have been involved in price-fixing and reducing competition since the enactment of this law.
However, it seems likely that discussions on key telecom issues will take time to develop at the National Assembly.
Kim Aram, an analyst at Shinhan Investment Corp., commented, “While both the ruling and opposition parties agree on the repeal of the Handset Distribution Act, there is a consensus that immediately repealing the law would lead to significant market disruption. Therefore, it’s unlikely that there will be any sudden changes to existing telecom policies following this audit.”
#KT #KimYoungshub #NationalAssemblyAudit #shareholderchange #telecommunications #malware #HyundaiMotorGroup #KEPCO #publicinterest #HandsetDistributionAct
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- Samsung Electronics Chairman Lee Jae-yong Visits Philippine Plant, Emphasizes Dominating the Automotive Market
- Samsung Electronics Chairman Lee Jae-yong emphasized the importance of "seizing opportunities" while inspecting the multilayer ceramic capacitor (MLCC) business, which is emerging as a key component in the automotive sector.
According to Samsung Electronics on the 7th, Chairman Lee visited the Samsung Electro-Mechanics manufacturing plant in Calamba, Philippines, on the 6th. After inspecting the MLCC production facilities, he discussed future business strategies with the management team of Samsung Electro-Mechanics, focusing on the expansion of markets such as artificial intelligence (AI), robotics, and electric vehicles (EVs).
Chairman Lee also held a meeting with employees working at the Calamba manufacturing plant, where he expressed his gratitude for their hard work and listened to their concerns.
Recently, Lee has been frequently visiting Samsung Electro-Mechanics' production sites in places like Busan, Tianjin in China, and Suwon, checking on business operations and stressing the importance of leading the high-value MLCC market.
The Philippine production facility, established in 1997, has been producing IT-related MLCCs and inductors since 2000. However, with the rapid growth of the EV and autonomous vehicle markets, the plant is now considering expanding its production to include high-performance automotive MLCCs.
Samsung aims to develop Busan as a specialized region for research, development, and production of key materials for MLCCs, while positioning its plants in China and the Philippines as global hubs for the production of IT and automotive MLCCs.
MLCCs are essential components that store electricity and then supply it in stable amounts, ensuring smooth operation of semiconductors. These capacitors are used in smartphones, EVs, and other devices, earning them the nickname "the rice of the electronics industry."
The MLCC market is projected to grow from KRW 4 trillion in 2023 to KRW 9.5 trillion by 2028, more than doubling in size. In response to future demand, Samsung Electro-Mechanics is continuously expanding its investment in the MLCC sector.
Notably, while around 1,000 IT MLCCs are used in a smartphone, an electric vehicle requires between 3,000 to 20,000 automotive MLCCs, with their price being more than three times higher. As a result, Samsung Electro-Mechanics is concentrating its efforts on the automotive MLCC business, particularly for EVs.
Chairman Lee has identified the automotive electronics sector as a future growth engine for Samsung.
In 2016, Samsung acquired Harman, the leading company in digital cockpit (digital dashboard) and car audio systems, and Harman has recently begun to see significant growth.
In 2023, Chairman Lee met with Elon Musk, CEO of Tesla, to discuss comprehensive cooperation in areas such as automotive semiconductors.
#SamsungElectronics #LeeJaeyong #MLCC #EV #automotivecomponents #Philippines #futuregrowth #businessstrategy #Harman #Tesla
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- Chung Mong-ik at KCC Glass Indonesia Plant Furnace Ignition Ceremony: "A New Milestone in Technology"
- KCC Glass is set to launch the first overseas glass production plant among South Korean companies.
On October 4, KCC Glass announced the completion of its Batang plant in Central Java, Indonesia, with a furnace ignition ceremony held the previous day. The event was attended by KCC Glass Chairman Chung Mong-ik, Indonesia’s Investment Minister Bahlil Lahadalia, and around 200 officials from both KCC Glass and the Indonesian government.
The Batang plant, the Indonesian subsidiary of KCC Glass, covers an area of 460,000 square meters (approximately 140,000 pyeong) and has the capacity to produce 440,000 tons of float glass annually. The plant can produce up to 1,200 tons of float glass per day, enough to cover the exterior of a 123-story skyscraper like Lotte World Tower.
KCC Glass has invested KRW 300 billion (approximately USD 217 million) into the Batang plant since its groundbreaking ceremony in May 2021, making it the first overseas glass production facility by a South Korean glass manufacturer.
After the furnace heating period, KCC Glass plans to begin full operations by the end of October 2024.
With the completion of the Batang plant, KCC Glass now has a combined annual production capacity of 1.74 million tons of float glass, including output from its domestic Yeoju plant.
KCC Glass aims to use the float glass produced at the Batang plant to tap into the rapidly growing Indonesian market and expand into ASEAN, Oceania, and the Middle East. To achieve this, the company plans to invest an additional KRW 700 billion (approximately USD 506 million) to develop the Batang plant into a "comprehensive glass cluster."
Chairman Chung stated, "KCC Glass's innovative technology has achieved another milestone. The Batang plant will elevate Indonesia as a key player in the global glass industry."
#KCCGlass #BatangPlant #Indonesia #glassproduction #floatglass #ASEAN #businessinvestment #ChungMongik #globalexpansion #glassindustry
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- LS Group Expands Battery and Electric Vehicle Business Portfolio as New Growth Engines
- LS Group is rapidly expanding its battery and electric vehicle (EV) business across multiple sectors.
In response to the growing demand for electrical and power energy in the era of electric vehicles, robotics, and artificial intelligence (AI), LS Group is strengthening its existing core industries while accelerating the development of a new business portfolio in batteries, electric vehicles, and semiconductors.
In March 2024, LS Group participated in the "InterBattery 2024" exhibition held at COEX in Seoul, showcasing its future energy technologies, including battery materials, industrial energy storage systems (ESS), EV components, and charging systems.
Gu Ja-eun, Chairman of LS Group, who attended the exhibition for the second consecutive year, emphasized the importance of staying ahead in the electric vehicle ecosystem, noting that the industry is evolving with increasingly advanced technologies.
As of October 4, LS Group's subsidiaries—including LS Cable & System, LS Electric, LSMnM, and LS E-Link—are leveraging their extensive experience in power infrastructure and energy solutions to explore new opportunities in battery materials, EV components, and charging solutions.
LS Cable & System broke ground on two new factories in Mexico on August 2, including a plant for high-capacity power distribution systems (bus ducts) and EV battery components. These plants will serve as export hubs for the North American market, supplying EVs, batteries, semiconductor factories, and data centers.
LS Materials, a subsidiary of LS Cable & System, leads the global market in large ultra-capacitor production, holding the top spot in both market share and technological competitiveness.
In February, LS Eco Energy, another LS subsidiary, formed a joint venture with Germany’s Vacuumschmelze, Europe’s top permanent magnet producer. The joint venture will produce 1,000 tons of neodymium permanent magnets annually by 2027, targeting the EV, wind turbine, and electronics markets.
With the expected surge in neodymium demand due to the growth of the EV market, LS Eco Energy is well-positioned to capitalize on the market, which is expected to grow from the current 150,000 tons per year to 400,000 tons by 2030.
LS Electric is also deepening its involvement in the EV market. In February, it signed a partnership with LG Energy Solution to localize battery manufacturing automation solutions, including control systems and components for battery pack production.
LS e-Mobility Solutions, LS Electric’s EV component subsidiary, completed the construction of an EV parts plant in Durango, Mexico, earlier this year. The plant has a production capacity of 5 million EV relays and 4 million battery disconnect units (BDUs) annually. LS e-Mobility Solutions is targeting North American automakers, including Ford and Stellantis, with plans to expand production lines and achieve KRW 700 billion in North American revenue by 2030.
LS MnM, a non-ferrous metal materials company, made its first foray into the EV battery materials business in March 2022 by completing a nickel sulfate plant in partnership with Toricom. Nickel sulfate is a key material for next-generation EV batteries, and by 2029, LS MnM aims to produce 62,000 tons of nickel sulfate annually, enough for 1.25 million EVs.
LS MnM is also building battery material production facilities in Korea’s Saemangeum and Onsan industrial complexes, establishing a value chain from nickel sulfate to precursors and cathode materials in partnership with LS-L&F Battery Solutions.
Meanwhile, LS Group’s holding company, LS, is focusing on the EV charging business. In 2022, LS E-Link was established in partnership with E1 to develop and operate EV charging infrastructure. LS E-Link specializes in large-scale charging solutions for B2B clients, offering advanced technologies such as ceiling-mounted chargers and automated charging control systems.
In July, LS E-Link signed an MOU with the Seoul city government to expand EV charging infrastructure. It plans to introduce smart chargers that can sequentially charge multiple vehicles in restricted spaces, such as bus depots.
LS E-Link is preparing for an IPO by the end of 2024 to raise funds for further investments in technological advancements and business expansion, with plans to strengthen its partnerships and performance in the logistics and transportation sectors.
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