Stepping out of prison this morning, what awaits the Samsung ‘prince’?

Samsung Electronics Vice Chairman Lee Jae-yong was pardoned this morning Korean time after serving more than 30 months in prison for bribery.

Nikkei reported that the 53-year-old businessman, whose title is a key figure of Samsung, walked out of the Seoul Detention Center in Uiwang, a city just south of Seoul, this morning. He said a few brief words to the waiting reporters, bowed his head, and got in the car to leave.

Lee was included in the list of 810 prisoners who will be pardoned on Korea’s Liberation Day. The nine-member Parole Review Committee, chaired by Deputy Justice Minister Kang Sung-kook, decided to release Lee during a meeting on Monday.

“In particular, Samsung Electronics Vice Chairman Lee Jae-yong has been included in the list as we consider the national economy and the global economic situation due to the COVID-19 pandemic,” a statement said. said by the Department of Justice. “We also looked at various factors, including public sentiment and his attitude in prison.”

Lee served 18 months, or 60% of the 2.5-year term, imposed by the court for bribery and embezzlement. The Seoul High Court ruled that Mr. Lee embezzled 8.7 billion won ($7.4 million) in company funds to bribe ousted former President Park Geun-hye in 2015.

What awaits the “prince”?

Mr. Lee’s release comes as Samsung faces stiff competition from Taiwan Semiconductor Manufacturing Co., Intel and other players in the global chip industry. The three companies all aspire to lead the market as semiconductors become important amid the US-China conflict over trade and technology.

The South Korean tech giant, which currently leads the global memory chip market, also aspires to become the top logic chip maker by 2030. It plans to spend 171 trillion won to accelerate research into technologies. advanced semiconductor process technology and build a new chip factory.

Meanwhile, China’s Xiaomi is intent on dethroning Samsung as the leader of the global smartphone market. Xiaomi recently overtook Apple to become the world’s second-largest smartphone seller.

“Our current mission is to consolidate the No. 2 position in the global market,” Xiaomi founder and CEO Lei Jun said on Tuesday. “We aim to be the global No. 1 in the next three years.” Meanwhile on Wednesday, Samsung announced its new foldable smartphone lineup, which seeks to make the product This product becomes more attractive and more affordable. It said global smartphone shipments reached 60 million units in the second quarter, compared with more than 70 million units in the previous three months.

Samsung considers investment and M&A plans. Observers predict the company will accelerate its big business plan in the near future. Korea’s leading electronics group is considering building a $17 billion chip factory in the US but has not finalized the location. Texas, Arizona and New York are considered potential candidates, but Samsung is still negotiating with the government about incentives for the factory.

The decision to build a chip factory in the US is urgent because Samsung’s competitors are all trying to expand production capacity amid the global chip crisis. For example, TSMC – the world’s largest chip contractor – announced an investment of $100 billion over the next three years. TSMC’s $12 billion Arizona factory is expected to begin mass production from 2024. In addition, there are rumors that the Taiwanese company will build more factories in Germany and Japan.

Meanwhile, Intel announced an investment of 20 billion USD to increase capacity in the US and return to the chip processing market. Intel is said to be considering acquiring chip maker GlobalFoundries.

With Mr. Lee’s release from prison, Samsung is expected to perfect its M&A strategy. In a teleconference last month, the company emphasized that it would pursue a “meaningful” M&A deal within three years and was looking at areas like AI, 5G and autonomous cars. Samsung’s last major acquisition took place in 2016 when it acquired Harman International Industries for $8 billion.

Regarding the issue of release, the Nikkei newspaper said that Lee’s case is far different from that of his father, the late chairman Lee Kun-hee. Mr. Lee has received two presidential pardons. The second, in 2009, happened after he was given a three-year suspended sentence for embezzlement and tax evasion.

Chung Mong-koo, now honorary chairman of Hyundai Motor, was sentenced in 2007 to three years in prison for embezzlement and breach of trust. However, an appeals court judge later suspended the prison sentence, arguing that Mr. Chung was too important to the national economy.

SK Chairman Chey Tae-won, who is serving a four-year sentence for embezzlement, was pardoned by Park while in office in 2015 in a Liberation Day clemency aimed at boosting the group’s investments. group.

The aforementioned amnesty orders partly show the lenient treatment that South Korean leaders give chaebols that affect the country. The thinking of senior politicians is that it is better to let top business managers out of prison so they can contribute to the economy.