Samsung chief visits China in search for breakthrough

By Nam Hyun-woo

Samsung Electronics Executive Chairman Lee Jae-yong visited China to meet the world’s most influential business gurus, local reports and industry officials said Sunday, amid efforts to search for opportunities for a company breakthrough despite mounting doubts on its future viability.

Beijing Sina Technology reported that Lee visited Xiaomi's automotive plant in Beijing on Saturday, and met Xiaomi Chairman Lei Jun. Along with Lee, semiconductor firm Qualcomm CEO Cristiano Amon also visited the plant.

Details of their talks remain unknown, but industry officials assume the meetings were focused on deals involving Xiaomi’s electric vehicles. Xiaomi is a major competitor of Samsung Electronics in the smartphone and home appliance markets but stands as a potential customer for Samsung Electronics' car component business, particularly in semiconductors and displays.

Since 2015, Lee has highlighted car components as one of Samsung Electronics’ future growth drivers. As part of this, Samsung Electronics took over Harman International in 2017. Lee also noted the importance of advanced car capacitors during his October visit to Samsung Electro-Mechanics’ plant in the Philippines. Samsung Electronics and its subsidiary Samsung Display are also manufacturing memory chips and display products for cars.

In August last year, Samsung Electronics launched partnerships with Qualcomm for automobile semiconductors, supplying low-power double data rate 4X (LPDDR4X) automobile memory chips for Qualcomm’s vehicle platform, Snapdragon Digital Chassis.

According to industry officials, Lee visited the Xiaomi plant before attending the China Development Forum, slated for Sunday to Monday in Beijing. The forum is an annual event where high-ranking Chinese government officials meet directly with executives of global companies to attract foreign investment. Lee attended the 2023 edition.

Under the theme of “Unleashing Development Momentum for Stable Global Growth,” this year’s forum invited the world’s most famous business leaders, including Lee, Apple CEO Tim Cook, Siemens CEO Roland Busch, Qualcomm CEO Amon, Broadcom CEO Hock Tan, BMW Chairman Oliver Zipse, Mercedes-Benz Chairman of the Board and CEO Ola Kallenius, Pfizer CEO Albert Bourla, Eli Lilly CEO David Ricks and a slew of other big names.

“The forum is participated by the most illustrious business leaders across the world, thus attending it will be a chance for Lee to expand his network, potentially searching for partnership opportunities,” an industry official said.

Lee’s China trip is drawing attention as his first overseas outing after he was acquitted in a high court ruling last month on a 2015 merger between Samsung affiliates.

Samsung Electronics has been struggling with growing investor concerns over its future viability in recent months, as its two flagship businesses — chips and electronic appliances — both recorded sluggish performances. Samsung also lost its lead in the chip business, as it struggled to supply memory chips for Nvidia's artificial intelligence processors.

The company's outlook remains bleak, with added pressure from U.S. President Donald Trump's threats to scrap subsidies, which Samsung Electronics was set to receive in return for investing in the United States.

Despite mounting concerns, Lee has been keeping a low profile, refraining from making public appearances. Last week, he urged Samsung executives to adopt a "death-defying" mindset to navigate the growing challenges. However, this was a video message for Samsung employees only.

Against this backdrop, Lee’s China visit is viewed as a strategic move. Samsung Electronics operates a NAND flash plant and a semiconductor packaging facility in China. Though it remains uncertain whether Lee will be able to meet Chinese President Xi Jinping during his stay, smooth cooperation with the Chinese government is viewed as one of the reasons behind Lee’s attendance at the forum.

Despite trade tensions between the U.S. and China, Beijing is a crucial market for Samsung Electronics. According to the company, its revenue from China reached 64.93 trillion won ($44.3 billion) last year, up 53.8 percent from 42.2 trillion won a year earlier. China was the company’s biggest market last year, with revenue standing at 3 trillion won higher than that from the Americas.