South Korea’s prime minister Han Duck-soo announced he would recommend a pardon for Samsung vice chairman and heir Lee Jae-yong during a parliamentary session on Wednesday.
The comments were made as Lee is on parole. He was released from jail in August of last year after serving time for bribery and embezzlement charges stemming from an incident that involved former president Park Geun-hye in 2017.
The recommendation would go to president Yoon Suk-yeol, who is expected to hand out pardons per tradition on August 15 – South Korea’s Independence Day. Lee’s incarceration and subsequent parole have dismayed some business leaders who have lobbied for his release for the sake of Korea’s economy in these trying COVID-affected economic times. Pardons are often granted to South Korean execs for such business-related crimes.
Lee became the de facto head of Samsung when his father Lee Kun-hee suffered a debilitating heart attack in 2014. He retained his title of vice-chairman through his incarceration. According to the BBC, conditions of his parole include five years of restrictions on his business activities.
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Samsung does not need a hamstrung boss right now. According to Q2 2022 results released today, segments of the tech giant’s business aren’t doing so well.
“In the Memory Business, server demand is expected to remain solid while PC and mobile demand is likely to see continued weakness,” declared the chaebol, which also warned that demand for consumer and mobile products resulted in DRAM and NAND shipments coming in below growth guidance.
“For PC, there is a possibility that the slump in demand may expand to enterprise segments,” warned Samsung, which is crossing its fingers for a successful year-end promotional season.
The company said macroeconomic uncertainties – such as foreign exchange fluctuations, the rising costs of components and logistics services – are expected to persist through the second half of the year.
Other warnings were issued for:
- The company’s large panel business, which was weaker due to “initial ramp-up costs of quantum-dot (QD) displays and a decline in LCD prices”;
- The Mobile eXperience business, which posted a sequential decline in earnings thanks to material and logistics costs;
- The Visual Display business, which faced earning declines due to weak global TV demand;
- A decline in large display sales and high display development costs;
- A prediction that semiconductor customers won’t buy strongly as they worry about recessions and geopolitical events;
- Volatile earnings in the smartphone market, which may grow with new product launches, but also might crash thanks to “a number of difficult-to-predict external factors”.
Despite all that doom and gloom, Samsung’s quarterly revenue did grow 21 percent year-on-year to over $59 billion.
Samsung’s revenue growth and extremely diverse portfolio presents a better scenario than other Korean tech manufacturer LG Display, which reported on Wednesday a year-on-year net loss of over $290 million for its Q2.
The company said its bottom line was hurt by COVID-19 lockdowns in China that affected supply chains, and slow demand for display panels. On its earnings call, execs said the company will discontinue production of some products and reduce capacity into the first half of 2023, while refocusing on the OLED business.
“Panels for TVs accounted for 31 percent of the revenues in the second quarter, while panels for IT devices including monitors, laptops, and tablets accounted for 45 percent, and those for mobile devices and the others accounted for 24 percent,” reported LG Display. ®