|Bid||51,500.00 x 0|
|Ask||51,600.00 x 0|
|Day's range||50,800.00 - 51,500.00|
|52-week range||42,500.00 - 62,800.00|
|Beta (5Y monthly)||0.95|
|PE ratio (TTM)||N/A|
|Earnings date||29 Jul 2020 - 04 Aug 2020|
|Forward dividend & yield||1,416.00 (2.81%)|
|Ex-dividend date||30 Mar 2020|
|1y target est||54,903.00|
Samsung Electronics Co Ltd <005930.KS> said on Monday it has begun construction of a new domestic production line for NAND flash memory chips, betting on demand for personal computers and servers as the coronavirus prompts more people to work from home. The world's largest memory chip maker is targeting the second half of next year to mass produce the chips, used for storage, on the added line in its plant in Pyeongtaek city, which is within a two-hour drive from the capital Seoul. Samsung said the additional capacity will also help meet demand for 5G smartphones and other devices, despite recent delays in deployments of 5G networks in Europe and other countries due to the health crisis.
Samsung Electronics Co Ltd said on Monday it has begun construction of a new domestic production line for NAND flash memory chips, betting on demand for personal computers and servers as the coronavirus prompts more people to work from home. The world's largest memory chip maker is targeting the second half of next year to mass produce the chips, used for storage, on the added line in its plant in Pyeongtaek city, which is within a two-hour drive from the capital Seoul. Samsung said the additional capacity will also help meet demand for 5G smartphones and other devices, despite recent delays in deployments of 5G networks in Europe and other countries due to the health crisis.
(Bloomberg) -- When Justin Sun met Warren Buffett for dinner in January, he wasn’t seeking advice on stocks. The crypto mogul had spent a record $4.6 million at a charity auction for the opportunity to lecture the world’s most famous investor on the benefits of Bitcoin.It was exactly the sort of behavior that Sun’s known for -- abrasive, ostentatious and, ultimately, impossible to ignore. Like the $200 billion crypto industry itself, he is young and hungry for the respect of traditional financiers like Buffett, who deems Bitcoin basically worthless.Still shy of his 30th birthday, Sun founded one of the largest blockchain platforms, Tron, in 2017 and turned it into a virtual Las Vegas with gambling apps. He’s rubbed shoulders with Apple Inc. and Alibaba Group Holding Ltd. founders, hired celebrity endorsers like the late Kobe Bryant and drawn accusations of plagiarism, which he has denied, more than once. What he says and does can move crypto prices, and his aggressive acquisitions have earned him both admiration and notoriety in the blockchain community on his way to consolidating power.“I’m a true believer of blockchain. It’s once in a lifetime,” he said in a rare in-depth interview from a luxury office suite overlooking Hong Kong’s Victoria Harbour. “It’s only people who don’t understand it who question me.”Making his personal fortune by embracing Bitcoin as early as 2012, and now by his own account worth somewhere in the hundreds of millions of dollars, Sun is part of a second wave of crypto entrepreneurs who envision putting more than just digital money and payments on a decentralized platform. Last week, Sun and his team touted an upcoming major update to Tron, which will include more privacy features and enterprise applications.Newer blockchains like Tron let developers build so-called decentralized apps, or dapps, on their platforms. Ethereum is the foremost among them, with its co-founder Vitalik Buterin offering a simple analogy: if Bitcoin is a pocket calculator, platforms with dapps are akin to smartphones. But unlike Android or iPhone apps, dapps are decentralized in the sense that they aren’t run on one server or by any single entity.Sun’s Tron has 342 active dapps and more than 230,000 users, both roughly half Ethereum’s totals, according to data tracker Dapp Review. It’s been accused by researchers like Digital Asset Research of copying Ethereum’s code without attribution, and by Buterin himself of stealing words from other projects’ whitepapers. Tron and Sun have denied both accusations.The bulk of business done on Tron today revolves around the largely unregulated field of crypto gambling, with a January Dapp Review report describing it as “Las Vegas on the blockchain.” In the first quarter, casino dapps comprised 92% of Tron’s $411 million total transaction volume, according to the Binance-owned researcher. Sun said the Dapp Review estimate was inaccurate and over-stated the gambling activity on the Tron blockchain. In fact, such transactions are only a fraction of the total, he said.Sun “identified niche customer bases, namely gamers and gamblers, that have great reasons to use blockchain, drive a lot of transactions, and are crypto savvy,” said Matthew Graham, chief executive officer of Sino Global Capital, a Beijing-based blockchain consultancy.Since its inception, Tron has been augmented with the acquisitions of live-streaming service DLive, briefly the exclusive online home of YouTube star PewDiePie, and file-sharing service BitTorrent Inc. Through a partnership with Samsung Electronics Co., Tron dapps can be downloaded via one of the world’s most widely distributed mobile app stores.Sun has proven himself an able marketer, raising $800,000 in under five minutes through a public token sale for his lending platform, called Just. He also commands an audience of two million Twitter followers.But he’s also been challenged on basic information. While Sun said he often covers the $5 million quarterly operational costs for Tron, Ryan Dennis, a spokesman for the nonprofit Tron Foundation that coordinates the blockchain platform’s operations, denied that figure -- saying they won’t be able to get accurate cost numbers “due to the coronavirus pandemic changing everything on a day-to-day basis.”As a sociology student in the U.S., Sun founded an online magazine about current affairs -- though it closed after he was accused of plagiarism by another author. Sun has denied the accusation, saying he merely imitated the author’s style.He then made the switch to tech.After an unsuccessful attempt to set up China operations for American crypto company Ripple in 2014, Sun went back to the drawing board with $5 million of venture-capital money from backers like IDG Capital and ChinaEquity Group. He tried almost every hot idea in China’s internet space, finally finding success in Peiwo, which let users connect with random strangers via voice messages. That app would later be slammed by China’s top state news agency for spreading vulgar and pornographic content.On social media, he billed himself as Alibaba co-founder Jack Ma’s first millennial protégé, since he was picked up in 2015 by the billionaire’s MBA program. When fellow tech entrepreneurs ran into cash crunches, he was often quick to say he would lend them money. He said he had a 100 million-yuan ($14 million) charity budget for 2019, part of which was distributed in cash giveaway campaigns via his Weibo account.Sun’s dinner with Buffett is still the banner image on his Twitter profile. The meeting had been scheduled for last July, but three days before the planned date Sun rescheduled, citing a bout of kidney stones. Later that week, he took a selfie and then live-streamed himself with San Francisco’s Bay Bridge in the background to rebut a news report that he was under Chinese border control. He then apologized on Weibo to the Chinese regulators and public for his “excessive self-promotion.” He was banned from the microblogging site at the end of 2019. (Sun now has a team, including a photographer, to manage his Twitter and Instagram accounts.)Read more: Buffett Lunch Mystery Deepens as His Date Apologizes to SocietyWhen Sun finally sat down with Buffett, his entreaties crashed against a wall of skepticism.“It’s not just Buffett, the Chinese government also has the same attitude,” Sun said.Sun shut down his Beijing offices last year, after China launched a renewed crackdown on a crypto industry it views with suspicion. He said he hasn’t returned to mainland China since the end of 2018, though he’s not prohibited from doing so.During the Covid-19 pandemic, the jet-setting entrepreneur has been stuck in Hong Kong. But he has continued to stumble into controversy. In February, Sun bought the social network Steemit, billed as “owned and operated by its users,” along with 30% voting control over its platform. Fearing that gave Sun too much power, part of the Steemit community temporarily froze his stake and then split the blockchain into a whole new branch.“His playbook might be the optimal strategy during the early barbaric growth period of the crypto industry,” said Wayne Zhao, analyst and managing partner of researcher TokenInsight. “You are nothing without people’s attention, no matter if it’s good or bad.”(Updates with Sun’s comment in the eighth paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg Opinion) -- Buried in a set of little-known data are early signs that the hardware side of the technology sector may be rebounding from the pandemic-driven plunge.Investors generally need to wait until a few weeks after a quarter closes to get a sense of how well (or badly) business has been, or hope that a company will provide an update when the situation changes. Except in Taiwan. A decades-old regulation requires companies there to report sales every month. This information isn’t useful only to investors in locally traded stocks. What’s listed is a broad range of companies that make chips, components, half-assembled modules and final products used in almost every electronics device in the world. The numbers can also provide a snapshot of output in China, where most Taiwanese technology manufacturers have the bulk of production.As early as January, it became obvious that the coronavirus would be a nightmare for tech companies. We now know that Apple Inc. posted a 7.2% drop in March-quarter sales of iPhones and iPads, while its major supplier, Foxconn Technology Group, suffered its biggest dive in revenue for seven years.More interesting is to see what’s been going on since. A look at April sales data from Taiwan enabled me to crunch numbers. What we find is a bounce in revenue that gives some hope for the global sector.Taiwan Semiconductor Manufacturing Co. and Foxconn’s Hon Hai Precision Industry Co. are the most famous names in this data set, because they’re the biggest in their category and have a VIP client list that includes Apple, Qualcomm Inc., Huawei Technologies Co. and Sony Corp. Yet hundreds of others, such as Pegatron Corp., Quanta Computer Inc. and Largan Precision Co., collectively supply most of the industry.By aggregating the data month by month, comparing to a year earlier to smooth out seasonality, and looking at the sub-sectors within tech — defined by the Taiwan Stock Exchange — such as components suppliers, chipmakers, or computer assemblers, we can get an understanding of what was happening just a few weeks ago.Computers and peripherals, which include major PC and server makers Quanta and Compal Electronics Inc., showed the largest rebound, from an 11.9% drop in the January to March period to a 7.9% rise in April. Electronics parts and components, such as circuit-board supplier Compeq Manufacturing Co., turned a mild decline into solid growth, from a 3.1% decline into a 9.1% increase. Other electronics, including Hon Hai, which not only assembles iPhones but servers and networking equipment, went from an 11.8% fall to flat. Chips, headlined by TSMC, remained incredibly strong. Optoelectronics, which is largely displays and camera modules, shows a prolonged decline.One of the key takeaways is the relative strength in corporate-focused hardware, and possible continued weakness in gadgets. Foxconn pointed to this earlier in May, when it told investors that its consumer-devices division, which encompasses iPhones, would fall at least 15%, while enterprise products would climb 10%.There are two important caveats to the data.The first is that they track just Taipei-listed companies, and not some big names like Huawei and Samsung Electronics Co., which also manufacture their own hardware. However, it’s a like-for-like comparison — those companies aren’t included in last year’s data, either — and the broad reach of Taiwan’s tech sector means that even Huawei and Samsung are likely part of its supply chain.A more important note is that this is just for one month. Some of that April uptick is simply catch-up production for time lost at the height of the pandemic. Yet clients wouldn’t place orders if they didn’t feel that there’s end-demand somewhere. Autos and textiles are cutting production and shuttering factories in the knowledge that such a pickup in sales isn’t likely. With global turmoil making companies reticent to give predictions, investors wait in the dark for an update or a quarterly conference call. Even if we don’t know whether this is a true rebound, or merely a dead-cat bounce, at least there’s more timely data available to examine.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Tim Culpan is a Bloomberg Opinion columnist covering technology. He previously covered technology for Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Samsung is integrating its blockchain wallet with Gemini Trust, the U.S.-based crypto exchange and custodian.
(Bloomberg) -- Alibaba Group Holding Ltd. pioneered the use of live-streaming hosts to sell everything from lipstick to smartphones in China. Now, the e-commerce giant wants to repeat that success globally with the help of a million influencers on forums from TikTok to Instagram.AliExpress, the company’s online marketplace for shoppers outside China, is on the hunt for social media personalities to hawk wares on its online malls around the world. It’s looking to attract more than 100,000 content creators this year to its recently launched AliExpress Connect, rising to over a million in three years. The platform offers a matchmaking service, helping pair social media influencers with brands and merchants looking to market their products. Its initial focus is Europe, where Russia, France, Spain and Poland comprise the majority of users.Alibaba hopes to replicate the success it’s enjoyed with so-called key opinion leaders driving sales on its China online marketplace Taobao. “For both Taobao and AliExpress, social content is a way to diversify offerings, but not to generate revenue,” Yuan Yuan, head of operations for AliExpress, told Bloomberg News. Influencers will help users stick with the platform instead of just making a one-time purchase. “The goal is to accumulate users, keep them there and encourage them to remain active.”China’s largest e-commerce company currently gets just a fraction of its retail revenue from outside its home country, but it’s harbored bigger international ambitions for years. The move marks Alibaba’s latest global push and comes at a time when Covid-19 is fueling an unprecedented boom in social media. The company’s rivals, including TikTok proprietor ByteDance Ltd. and Tencent-backed Pinduoduo Inc., are playing catch-up in live streaming and other means of social commerce championed by the Taobao Live app.Global social giants like Facebook Inc. have also added new features that support online shopping. In the U.S., more than 75 million social-network users aged 14 or older are expected to make at least one online purchase this year, up over 17% from 2019, according to research firm eMarketer.Influencers and content creators can sign up for Connect using TikTok, Instagram, Facebook and other social accounts. They can then solicit assignments from AliExpress merchants seeking help in promoting their goods or services. This gives the influencer options, from merely reposting the seller’s social media posts to creating original videos. Commission fees can be based on the sales the influencers generate.AliExpress is one of two Alibaba online bazaars for international buyers, the other being the Southeast-Asia-focused Lazada. AliExpress merchants are mainly small, export-oriented businesses in China, but global brands like Samsung and Oral-B have increasingly set up shop on the platform, targeting regional markets. Its top consumer markets include Russia, the U.S., Brazil and Spain.Yuan said AliExpress aims to help at least 100 of its army of a million influencers earn an annual income of more than $1 million within three years. “Only if they can make money will they be motivated to create good content for our platform,” she said.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Chinese tech giant Huawei, one of the world's leading manufacturers of telecom equipment, networking hardware, and smartphones, has been repeatedly slammed by the Trump administration's trade war against China. Last year, the U.S. Department of Commerce placed Huawei on an "Entity List," a group of firms that American companies cannot offer their technologies to without a special license. Earlier this year, it expanded that licensing requirement to all non-U.S. chipmakers that use American chipmaking equipment, intellectual property, and design software.
(Bloomberg) -- Arm Ltd., whose technology is a key component of chips that run most of the world’s smartphones, is offering new designs aimed at boosting the performance of Android handsets.The U.K. company said its new A78 model will offer a 20% increase in performance over its predecessor and announced a new Cortex-X program that will help chipmakers customize their offerings to deliver bursts of as much as 30% more processing speed.Arm offers chip designs and licenses the fundamental code used by processors to communicate with software that runs phones. Most Android phone makers use chips from Qualcomm Inc. or Mediatek Inc. Samsung Electronics Co. and Huawei Technologies Co. use those chipmakers’ components and their own products. Apple Inc. is an Arm licensee, but designs its own A series processors that are typically rated the speediest available.The customization that Apple has been able to bring to its own combinations of software and hardware has allowed it to claim performance leadership over phones that run Alphabet Inc.’s Google Android operating system. Such claims feature heavily in Apple’s marketing of the iPhone.“The pace of increasing performance in smartphones exceeds that of any other computing device category in the industry today,” Arm said in a statement. “To address this insatiable demand for the highest performance possible, we’re introducing a new engagement program called the Cortex-X Custom program to give our partners the option of having more flexibility and scalability for increasing performance.”Cortex X will let chip and phone makers add a different mix of cores to the combinations of components that run major smartphone functions. Current designs feature uniform sets of cores and more power-efficient ones that are used to maintain background functions without draining the battery. Arm’s new offering changes this approach. An X core might kick in for a short time, for example, when a piece of software is demanding the absolute maximum performance the chip can provide.Cambridge-based Arm is a division of Japan’s SoftBank Group Corp. Like other companies that rely on the smartphone market, Arm is looking for ways to help spur demand for the devices. The market already had stalled before the Covid-19 outbreak curbed sales and disrupted supply chains. In the first quarter of 2020, smartphone shipments dropped 12% from a year earlier, according to IDC.In addition to more powerful and efficient designs for the handsets, the smartphone industry is banking on faster fifth-generation, or 5G, networks to persuade consumers to upgrade their phones.Arm is also offering a new graphics chip design that will handle video and gaming content better, and updated machine-learning capabilities to help with artificial intelligence workloads.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- South Korean prosecutors have summoned Samsung Electronics Co. Vice Chairman Jay Y. Lee for questioning in an ongoing investigation into alleged accounting fraud and a controversial 2015 merger of two Samsung affiliates, dealing another legal blow to the country’s largest corporation.While expected, the decision marked a deepening of a long-running probe into the billionaire scion and his shipbuilding-to-smartphones Samsung Group conglomerate. The company’s de-facto leader was called into Seoul Central District Prosecutors Office at 8 a.m. local time Tuesday in relation to allegations over illegal acts in succession plans, the Yonhap News Agency reported. The summons came after the executive publicly apologized over his company’s role in scandals over his succession, which eventually led to the impeachment of former president Park Geun-hye. A spokesman at the agency confirmed Lee has been summoned, without elaborating.Lee has been at the center of a years-long scandal and graft trial that inflamed long-standing resentments against Korea’s most influential family-run conglomerates. He faces renewed charges of using gifts of expensive horses to win favor from the previous administration, which he has denied. The legal fight has disrupted his tenure at the helm of Samsung Electronics, the world’s leading producer of smartphones and memory chips. This month, the billionaire took the unusual step of apologizing for his role in the controversy, pledging his children would never run the conglomerate.“I give my word here today that from now on, there will be no more controversy regarding succession. There will absolutely be no infringement against the law,” Lee said at a hastily convened press conference at the time. “There will be no leaning on legal expediency or actions that cause ethical reproach. My sole focus will be on enhancing the corporate value of Samsung.”Read more: Samsung Heir Vows an End to Family Rule After Succession ScandalThe prosecutors office’s probe, which is separate from the corruption trial, centers on whether there were illegal acts during a merger between Samsung C&T Corp. and Cheil Industries -- the conglomerate’s de-facto holding company. That deal was regarded as an effort to cement Lee’s control over the conglomerate, which he has run since his father suffered a heart attack in 2014. Prosecutors are also likely to interrogate the heir about allegations of financial fraud at Samsung Biologics Co. The agency hasn’t brought any charges in the case so far. A Samsung Electronics spokeswoman declined to comment on Tuesday.Read more: The Never-Ending Trial Between a Billionaire Heir and His NationSamsung Group, South Korea’s largest conglomerate with more than $400 billion of market value, has grappled with legal issues for years. Dozens of current and former executives have been questioned, indicted or arrested over charges that range from graft and accounting issues to union-busting. Lee was imprisoned for about a year until his release in early 2018, then returned to court for a retrial last year when the scope of the alleged wrongdoing was revised. He again faces the possibility of jail.The current prosecutors’ probe kicked off after the country’s Financial Services Commission in 2018 said Samsung’s biotechnology unit “intentionally” violated accounting rules surrounding an initial public offering. The regulator said at the time the unit deliberately overstated the value of Samsung Bioepis Co. ahead of its 2016 IPO. Critics argued that Samsung Group orchestrated the accounting change to benefit the merger of Samsung C&T and Cheil Industries, which made Lee the largest shareholder at Samsung’s de-facto holding company and bolstered his succession plans.Samsung Biologics has denied the allegations and said its books were examined by external accounting firms, and that it had no impact on the 2015 merger as that was completed before the bio firm’s accounting change.(Updates with Samsung’s response in the fifth paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- The list of Intel Corp.’s annual supplier award winners tends to read like a who’s-who of the semiconductor industry’s biggest names. This year, it included a little-known Japanese company whose machines have become indispensable in the race to improve semiconductors and whose stock has been rocketing up as a result.Lasertec Corp. is the world’s only maker of testing machines required to verify chip designs for the nascent extreme ultraviolet lithography (or EUV) method of chipmaking. In 2017, Lasertec solved a key piece of the EUV puzzle when it created a machine that can inspect blank EUV masks for internal flaws. Last September, it cleared another milestone by unveiling equipment that can do the same for stencils with chip designs already printed on them. This March, Intel gave the tiny Yokohama-based company an award for innovation, its first after decades of doing business together.“That’s a major milestone for us,” Lasertec President Osamu Okabayashi said in an interview. “It means a lot to be recognized this way as a supplier.”The company’s stock has soared about 550% since the start of 2019, more than twice the gain of the second-best-performing security in the benchmark Topix index. Shares increased about 4% Tuesday, pushing its rise this year to more than 60%.Intel declined to say if it was buying EUV equipment from Lasertec, which already supplies test gear to its rivals Samsung Electronics Co. and Taiwan Semiconductor Manufacturing Co. The three chip fabricators are the only ones so far to announce EUV plans, because the technology is so complex and expensive. Okabayashi would only say that his company has “two or more” EUV customers.“This can be read as a sign that Lasertec’s tools are indispensable to Intel’s EUV roadmap.” said Damian Thong, an analyst at Macquarie Group Ltd.Read more: Japan’s Star Electronics Stock Will Be Vital to Intel, SamsungEUV is just entering the mass production phase after two decades in development, but investors are already betting Lasertec will be one of the key beneficiaries. The move to EUV overcomes key hurdles to shrinking manufacturing geometries of semiconductors, allowing more and smaller transistors to be crammed onto silicon. It promises to unleash another wave of gadgets that are slimmer, cheaper and more powerful.Last month, Lasertec raised its annual order forecast for the second time this year to 85 billion yen ($789 million) in the period ending June, nearly double the amount it received in fiscal 2019. The company is headed for the fourth straight year of record revenue and profits. Sales will climb 39% to 40 billion yen and profit will jump 76%, according to its estimates. And that’s likely to be just the beginning.Samsung earlier this month said it is building a 5-nanometer fabrication facility that will use EUV to make processors for applications ranging from 5G networking to high-performance computing from the second half of next year. Taiwan’s TSMC is pushing ahead with plans to adopt 3-nanometer lithography mass production in 2022 and announced plans to build an advanced fab in the U.S. Intel’s first product made using EUV is expected late next year.Their primary focus is on so-called logic processors, used to power devices and networking applications, but the new manufacturing technique will eventually filter through into the production of DRAM and other memory chips.Read more: Samsung Takes Another Step in $116 Billion Plan to Take on TSMC“Logic makers will be first to adopt EUV, with memory makers following later,” Okabayashi said. “The real volume of orders will come when they reach mass production stage. Right now it’s 7- and 5-nanometer chips. 3-nanometer is still in development stage.”Okabayashi expects each customer will probably need several of his testers, which could cost well over $40 million apiece and take as long as two years to build. A chipmaker would need at least one machine in its mask shop to make sure the stencils come out right. Another would go into a wafer fab to keep an eye on the microscopic wear and tear that result from concentrated light being projected repeatedly through the chip design stencils.“Lasertec is still trying to get a feel for this market and how big it can be,” Macquarie’s Thong said. “Their stock is moving on expectation of future orders. But there is little actual visibility on the scale of this market, so Lasertec retains a lot of capacity for surprise.”(Updates with share price in fourth paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Samsung Group heir Jay Y. Lee was questioned on Tuesday by prosecutors about a controversial 2015 merger and alleged accounting fraud that they said may have helped him advance his succession-planning agenda at the country's top conglomerate. The questioning brings fresh legal trouble for Lee who is already facing court trial over a charge of bribery aimed at winning support to succeed ailing group patriarch Lee Kun-hee, and which involved former South Korean President Park Geun-hye. Prosecutors have been investigating suspected accounting fraud at drug company Samsung Biologics after the Korean financial watchdog complained the firm’s value had been inflated by 4.5 trillion won ($3.64 billion) in 2015.
(Bloomberg) -- Huawei Technologies Co. has sought high-level assurances from Samsung Electronics Co. and SK Hynix Inc. they will continue to supply memory chips despite mounting pressure from the U.S. to isolate the Chinese telecommunications company, the Korea Economic Daily reported.The Shenzhen-based company called in senior officials at the two South Korean chipmakers’ Chinese units to ensure a stable supply of the semiconductors regardless of recent U.S. government restrictions, the report said, citing unidentified industry sources. Representatives for the two Korean companies denied the report on Monday as Samsung said such meetings had not taken place, while Hynix didn’t elaborate.Huawei is one of the five biggest clients for Samsung and SK Hynix, spending around 10 trillion won ($8.1 billion) to buy DRAM and NAND flash memory chips from the Korean companies every year, the newspaper said. The report comes amid rising pressure against global suppliers after U.S. President Donald Trump barred any chipmaker using American equipment from supplying Huawei without U.S. government approval.While memory chipmakers aren’t subject to the U.S. government restrictions, Huawei worries that the Trump administration could widen its restrictions later, according to the report.As the two South Korean companies supply more than 70% of the DRAM chips globally, including them in any U.S. action would threaten the survival of the Chinese company, said the newspaper. It cited an industry official it didn’t identify as saying that Huawei is quickly building its memory-chip inventory in preparation for a worsening scenario.(Updates with Hynix and Samsung’s responses from the second paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Samsung Electronics Co Ltd <005930.KS> has begun work on a sixth domestic contract chip production line, the company said on Thursday, to make logic chips for mobile phones and computers as it looks to cut reliance on the volatile memory chip sector. The South Korean firm is taking on bigger rival Taiwan Semiconductor Manufacturing Co Ltd (TSMC) <2330.TW> in the contract manufacturing business, where it competes for orders from customers such as Qualcomm Inc <QCOM.O>. "This new production facility will expand Samsung’s manufacturing capabilities," the company said in a statement on Thursday.
(Bloomberg) -- Samsung Electronics Co. has begun building a cutting-edge chip production line intended to help it take on Taiwan Semiconductor Manufacturing Co. in the business of making silicon for external clients.South Korea’s largest company said it’s started construction on a 5-nanometer fabrication facility in Pyeongtaek, south of Seoul, dedicated to its made-to-order foundry business, an arena TSMC dominates. Based on the Extreme Ultraviolet Lithography or EUV process, Samsung expects the fab’s output to go toward applications from 5G networking to high-performance computing from the second half of 2021, it said in a statement.Samsung, the world’s largest maker of computer memory, smartphones and displays, in 2019 outlined its aim of spending $116 billion to compete with TSMC and Intel Corp. in contract chipmaking, making silicon for customers like Qualcomm Inc. or Nvidia Corp. Its announcement on Thursday coincides with the announcement of restrictions on the sale of semiconductors made with American gear to China’s Huawei Technologies Co., a constraint that threatens more than a tenth of TSMC’s business.“This will enable us to break new ground while driving robust growth for Samsung’s foundry business,” ES Jung, head of the contract chipmaking division, said in a statement.Read more: Behind Samsung’s $116 Billion Bid for Chip SupremacySamsung first unveiled its expansion blueprint in April 2019, outlining at the time its goal of hiring thousands and ramping up investment in logic chips in the years leading up to 2030. That initiative arose as sales of smartphones and consumer electronics plateaued and competition from Chinese rivals depressed margins.EUV is the latest and most advanced chipmaking method, requiring machines costing tens of millions of dollars and delivering better precision and performance in the chips it produces. TSMC and Samsung, through its spending plan, are the leaders in developing that process and expanding into 5nm and smaller manufacturing nodes.Before the arrival Covid-19, Samsung had begun collaborating with major clients on designing and manufacturing custom chips and that work was already starting to add to its revenue, a Samsung executive has said. The company’s newest fab in Pyeongtaek joins another 5nm facility in Hwaseong that will begin production in the second half of this year.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Sony Corp. and Microsoft Corp. have partnered to embed artificial intelligence capabilities into the Japanese company’s latest imaging chip, a big boost for a camera product the electronics giant describes as a world-first for commercial customers.The new module’s big advantage is that it has its own processor and memory built in, which allows it to analyze video using AI tech like Microsoft’s Azure, but in a self-contained system that’s faster, simpler and more secure to operate than existing methods.The two companies are appealing to retail and logistics businesses with potential uses like optimizing warehouse and factory automation, quantifying the flow of customers through stores and making cars smarter about their drivers and environment.At a time of increasing public surveillance to help rein in the spread of the novel coronavirus, this new smart camera also has the potential to offer more privacy-conscious monitoring. And should its technology be adapted for personal devices, it even holds promise for advancing mobile photography.Read more: Sony Releases Faster Camera Sensors With Integrated AIInstead of generating actual images, Sony’s AI chip can analyze the video it sees and provide just metadata about what’s in front of it -- saying instead of showing what’s in its frame of vision. Because no data is sent to remote servers, opportunities for hackers to intercept sensitive images or video are dramatically reduced, which should help allay privacy fears.Apple Inc. has already proven the efficacy of combining AI and imaging to create more secure systems with its Face ID biometric authentication, powered by the iPhone’s custom-designed Neural Engine processor. Huawei Technologies Co. and Alphabet Inc.’s Google also have dedicated AI silicon in their smartphones to assist with image processing. These on-device chips represent what’s known as edge computing: handling complex AI and machine-learning tasks at the so-called edge of the network instead of sending data back and forth to servers.“We are aware many companies are developing AI chips and it’s not like we try to make our AI chip better than others,” said Hideki Somemiya, senior general manager of Sony’s System Solutions group. “Our focus is on how we can distribute AI computing across the system, taking cost and efficiency into consideration. Edge computing is a trend, and in that respect, ours is the edge of the edge.”Sony’s advance is to eliminate the need for transfers within the device itself. Whereas Apple and Google still use conventional image sensors that convert light particles into computer-readable image formats for their chips to read, Sony’s new part is capable of doing the analytical work without any data leaving its physical boundaries.The AI-capable sensor may also help advance augmented reality applications. The two U.S. giants, whose iOS and Android operating systems control practically the entire smartphone market, are heavily invested in AR development. Google Maps now offers the option to show 3-D directions atop a video feed of a user’s surroundings while Apple is planning new 3-D cameras on its next set of iPhones in the fall. The agenda-setters of the mobile industry are looking for ever smarter mobile cameras, spurring the demand for more sophisticated imaging gear.Read more: Google Delivers an Answer to Apple on Augmented RealitySony already enjoys a substantial lead as the world’s foremost provider of image sensors, counting Apple, Samsung Electronics Co. and every major Chinese smartphone maker among its customers along with pro camera stalwarts like Hasselblad V, Fujifilm Holdings Corp. and Nikon Corp.Its next set of customers may be automakers.The AI-powered Sony sensor is capable of recording high-resolution video and simultaneously conducting its AI analysis at up to 30 frames each second. That rapid, up-to-the-microsecond responsiveness makes it potentially suitable for in-car use such as detecting when a driver is falling asleep, Sony’s Somemiya said. Without the need for a “cloud brain” as some existing systems have, Sony’s AI sensor could hasten the adoption of smart-car technology.”This on-chip approach enables a system design to be more flexible and even optimized, given that the cost of image processing, which is one of the most compute-intensive tasks for autonomous driving, can be offloaded from an electronic control unit,” said Shinpei Kato, founder and chief technology officer of Tokyo-based Tier IV Inc., which develops self-driving software.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- South Korea is not only one of the markets that’s recovering the fastest from the impact of the coronavirus pandemic, it’s also showing one of the broadest rebounds.The benchmark Kospi index has almost 35% of its members trading above their 200-day moving average, returning to levels last seen in mid-February, just before an explosion of virus cases in the country. That’s ahead of the 30% of stocks trending higher in the wider MSCI Asia Pacific Index, according to data compiled by Bloomberg.The Kospi has rallied about 33% from a decade low in March, with only seven of its almost 800 members posting a decline in that time. The index is also one of the top performers among major equity markets in Asia and well ahead of the regional benchmark’s 20% rally since its low. The South Korean index climbed 0.6% Monday.The market breadth of South Korea’s rally is especially evident given its largest member, Samsung Electronics Co., has risen only 15% from its March trough. The coronavirus crisis has been a net negative for global chipmakers, hampered by lower consumer demand for new PCs and smartphones despite greater interest in online services amid the lockdowns.Read: Samsung Has Yet to Fully Join Korea’s Stellar JumpThere may be even more room to run for South Korean equities as President Moon Jae-in pushes through significant fiscal spending plans to jump start the economy. And given the country’s strong record of fiscal management, it is in a position to get very aggressive on this front, Justin Jimenez, an economist with Bloomberg Economics, wrote in a report Monday.In a base case, Bloomberg Economics estimates South Korea’s debt-to-gross domestic product ratio would rise to about 44% this year and 46% in the next, up from 37% in 2019, according to government figures. Even in a more dire situation where additional fiscal support is needed, pushing the ratio to 50% of GDP by 2021, that would still be well below the G-20 average of 84% last year, Jimenez said.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Shares of South Korea's SK Hynix <000660.KS>, the world's No.2 memory chip maker and supplier to Huawei [HWT.UL], fell as much as 3.3% early on Monday after a U.S. move to curb semiconductor supplies to the Chinese company stoked fears about a demand hit. The U.S. Commerce Department said on Friday that foreign companies that use U.S. chipmaking technology will be required to obtain a U.S. license before supplying certain chips to Huawei, a maker of smartphones and telecoms equipment. The rules specifically target chips designed by Huawei and its affiliates, including chip-design unit HiSilicon and manufactured using U.S. technology.
(Bloomberg) -- Taiwan Semiconductor Manufacturing Co. plans to spend $12 billion building a chip plant in Arizona, a decision designed to allay U.S. national security concerns and shift more high-tech manufacturing to America.TSMC said Friday it will start construction of its next major fabrication facility in 2021, to be completed by 2024. While the investment falls short of its previous expenditure on cutting-edge factories, it’s a shift for a company that now makes semiconductors for major names like Apple Inc. and Huawei Technologies Co. mainly from its home base of Taiwan.As the world’s largest and most advanced maker of chips for other companies, TSMC plays a crucial role in the production of devices from smartphones and laptops to servers running the internet. Its decision to situate a plant in the western state comes after White House officials had warned repeatedly about the threat inherent in having much of the world’s electronics made outside of the U.S. TSMC had negotiated the deal with the administration to create American jobs and produce sensitive components domestically for national security reasons, according to people familiar with the situation.The Asian chipmaker’s U.S. investment underscores the delicate balance it needs to strike between its huge roster of American clients and China, which views independently governed Taiwan as part of its territory. Beijing’s ambition of creating a world-class domestic semiconductor industry has unnerved Washington, which fears the country’s technological ascendancy may pose a longer-threat. Executives at TSMC, which operates plants in Nanjing and Shanghai and makes chips that go into everything from 5G networks to American fighter jets, have emphasized the company is neutral.“The scale & technology is similar to what TSMC did in China, suggesting a balance between the U.S. & China,” Sanford C. Bernstein & Co. analysts led by Mark Li wrote after the announcement. “Overall, this is probably the minimal price to stay neutral. TSMC needs both U.S. & China to maintain scale & stay competitive and this is probably the minimal cost to keep this strategy.”Read more: Huawei Warns of ‘Pandora’s Box’ If U.S. Curbs Taiwan SupplyThe envisioned facility represents a small step in global industry terms. Upon completion, it will crank out 20,000 wafers a month, versus the hundreds of thousands that TSMC’s capable of from its main home base. And it will employ 5-nanometer process technology, a current standard that will likely become a few generations old by the time output begins in a few years.The higher cost of operating in America may have been a factor ahead of the decision. A true cutting-edge fab is expensive to build: The company spent NT$500 billion ($17 billion) to build an advanced facility in the southern Taiwanese city of Tainan that will supply new iPhones this year. It plans another $16 billion in capital spending in 2020. The Arizona plant still requires approval from TSMC’s board, which may hinge on incentives.“There is a cost gap, which is hard to accept at this point. Of course, we have -- we are doing a lot of things to reduce that cost gap,” TSMC Chairman Mark Liu said on a recent analyst conference call.U.S. Won’t Tolerate Tech Fence-Sitters Any Longer: Tim CulpanIf the federal government provides cash for a U.S. plant, it’ll mark a shift in policy and rhetoric from a Republican administration. Trump’s White House has rarely supported such direct industrial intervention, favoring market dynamics. A similar government-backed effort with Foxconn -- Apple’s main iPhone assembler -- in Wisconsin has so far not created as many jobs as expected.However, emerging trends may be forcing a reconsideration. The U.S. government is already giving or lending billions of dollars to keep companies afloat in the midst of a pandemic-fueled recession. The crisis has also highlighted how vulnerable global supply chains are to such shocks.The White House may also be motivated by broader political factors. Trump has attacked international trade deals and tried to limit China’s access to semiconductor technology, seeking to contain the country’s technological ascent. TSMC said its Arizona facility will create 1,600 jobs and a deal to bring highly skilled work to Arizona may help Trump’s re-election prospects this year.“TSMC’s plan to build a $12 billion semiconductor facility in Arizona is yet another indication that President Trump’s policy agenda has led to a renaissance in American manufacturing and made the United States the most attractive place in the world to invest,” U.S. Secretary of Commerce Wilbur Ross said in a statement.By producing chips for many of the leading tech companies, TSMC has amassed the technical know-how needed to churn out the smallest, most efficient and powerful semiconductors in the highest volumes. It manufactures important components designed by Apple and most of the largest semiconductor companies, including Qualcomm Inc., Nvidia Corp., Advanced Micro Devices Inc. and China’s Huawei. Shares of Applied Materials Inc., Lam Research Corp. and KLA Corp. rose on optimism that these U.S.-based providers of chipmaking equipment may face fewer export controls when supplying TSMC.Concentrating such valuable capabilities in the hands of one company in Asia is a concern for the U.S., especially when, across the Strait of Taiwan, China is rushing to develop its own semiconductor industry.TSMC’s local rival, GlobalFoundries Inc., has given up on advanced manufacturing and Intel Corp., the world’s largest chipmaker, mainly manufactures for itself. Its attempt to become a so-called foundry for external clients has failed to gain major customers. TSMC’s only other significant challenger is South Korea’s Samsung Electronics Co., which is investing more than $116 billion in its effort to keep up with the leader.“TSMC welcomes continued strong partnership with the U.S. administration and the State of Arizona on this project,” the company said in a statement. “This project will require significant capital and technology investments from TSMC. The strong investment climate in the United States, and its talented workforce make this and future investments in the U.S. attractive to TSMC.”Read more: Foxconn Factory Subsidy Estimate Slashed by Wisconsin Agency(Updates with analyst’s comment from the fourth paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- U.S. technology stocks are on their hottest winning streak of the year, yet those gains aren’t necessarily translating to the same boost for their peers in Asia.The tech benchmark Nasdaq 100 Index, heavily skewed toward the so-called FAANG stocks -- Facebook Inc., Apple Inc., Amazon.com Inc., Netflix Inc., Google parent Alphabet Inc. -- as well as top position Microsoft Corp., has now rallied for six straight days. It has rebounded 33% since a low in March as investors piled into technology and biotech shares seen as winners amid the social-distancing lockdowns of the coronavirus pandemic.Read: Nasdaq’s Resilience Pushes Benchmark Dominance to 20-Year HighThere’s no equivalent tech mainboard in Asia, with the MSCI Asia Pacific Information Technology Index the closest comparable. It’s up a comparatively weak 24% since mid-March, and the top stocks in the gauge, Taiwan Semiconductor Manufacturing Co. and Samsung Electronics Co., have lagged that gain. Tencent Holdings Ltd., the online gaming and social-media services giant that analysts expect will report Wednesday an 18% revenue increase amid the virus outbreak, isn’t part of that index.While the top of the Nasdaq 100 enjoys a more diverse mix -- Google, Netflix and Facebook leveraging demand for online and social-media services from consumers stuck at home, alongside Amazon’s online delivery -- the Asia Pacific index is largely dominated by chipmakers TSMC and Samsung. They account for more than a third of the gauge.The coronavirus pandemic has been a net negative for chipmaker stocks worldwide. Despite growth in data centers, they’ve been hit by concerns about lower end-market demand for new personal computers, smartphones and autos, Bloomberg Intelligence analysts Anand Srinivasan and Marina Girgis wrote in a May 1 note.Tencent not being part of the Asia Pacific tech index is also hurting it. After falling less than its peers during the initial market downturn, the stock is up 14% for the year, climbing to a two-year high on Monday.Global mobile game sales hit a record for the week ended May 3, according to Sensor Tower, with holidays in China and Japan also helping gains, BI’s Matthew Kanterman and Vey-Sern Ling wrote in a note Monday. “Growth should continue above the long-term market potential for the duration of the pandemic, likely through 2Q,” they said.Tencent was also included as a “select stock pick” as internet, health-care and property sectors are among those to benefit from China’s upcoming National People’s Congress, Citigroup Inc. analysts including Pierre Lau wrote in a May 11 note.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg Opinion) -- Ever since Donald Trump fired the first shot in the U.S. trade war with China, one technology company has been sitting in the middle, trying to avoid the crossfire. It’s wonderful to be able to sell weapons to all sides, until one forces you to choose.Taiwan Semiconductor Manufacturing Co. is in the enviable position of being a critical supplier to both countries. The company, headquartered in famed Hsinchu Science Park, makes the world’s most advanced chips for the likes of Apple Inc., Qualcomm Inc., Nvidia Corp. and Huawei Technologies Co. The U.S. fear, as portrayed by the White House, Pentagon and Commerce Department, is that allowing China to procure the world’s best semiconductors while America is unable to make them at home is an urgent and critical national security threat. That’s spurred a two-pronged strategy in recent years: Limit Chinese access to and development of chip technology, and bolster domestic prowess.TSMC’s strategy has been to stay neutral. It has most of its capacity in Taiwan, one new and one not-so-new factory in China, and an old facility in Washington state. A year ago, I wrote that chairman Mark Liu had politely pushed back against pressure to expand in America, citing the steep costs. I concluded: “TSMC won’t be able to sit on the fence forever. While Liu may want to just make chips, he’ll eventually have to make a choice.”That day has come. The coronavirus pandemic has highlighted Washington’s need to protect supply chains from disruption, and heightened concerns about reliance on Taiwan, as the Wall Street Journal reported over the weekend. To that end, the administration is pushing hard to get chipmakers, including Intel Corp., TSMC and Samsung Electronics Co., to expand in the U.S., and to use their best technology, the WSJ wrote.Unsurprisingly, Intel is making the case that the U.S. should strengthen its domestic production for “geopolitical” reasons. The company has most of its staff, and more than half its plants and equipment, in the U.S., including manufacturing in Arizona, New Mexico and Oregon.While best-known for supplying processors used in PCs and servers under its own name, Intel also operates a foundry business that does contract manufacturing using clients’ own designs. Once the world leader in chip production, the Santa Clara, California-based company has fallen behind and now trails TSMC and South Korea’s Samsung.Intel clearly sees an opportunity. If it can convince defense and commerce officials that it’s in the interest of national security to mandate that at least some chips be made domestically, then it may have a shot at getting back into the foundry game. TSMC has been trying to push back, or at least to get a seat in the policy discussions. It recently hired former Intel lobbyist Peter Cleveland to coordinate its efforts in Washington. As the old saying goes, “If you’re not at the table, then you’re on the menu.”But the other aspect of American strategy may be harder for the Taiwanese company to negotiate. Beyond expanding domestic capacity, Washington wants to limit Chinese access. To do so, the Trump administration is considering new rules to curb the use of U.S. equipment and materials in making chips for the likes of Huawei, arguing that the Chinese company is a conduit for Beijing’s espionage.That’s put TSMC and numerous other companies in a difficult position. The American market accounted for 59% of its sales last year, against 19% for Chinese clients. Yet the growth momentum clearly favors the world’s largest country, which is focused on developing components used in artificial intelligence, 5G communications, surveillance and possibly weaponry. TSMC has attempted to play Switzerland. A year ago, the company was sticking with the line that “We are everybody’s foundry.”Washington increasingly wants TSMC to be its foundry alone. Pressure has ramped up significantly over the past year, with the long list of U.S. clients and significant revenue contribution being used as a battering ram to make the point that America is the side to choose. Ten years ago, when Taipei-Beijing relations were friendlier, companies may have leaned toward China. Today, with China showing increasing belligerence and the U.S. supporting a greater global voice for Taiwan, the mood has shifted.It’s true that China is an important and growing market — Beijing has used that momentum to bring global companies to its shores — yet it won’t replace the U.S. in terms of size or technology leadership in the next 20 years. To assuage concerns, and win a reprieve on restrictions about supplying to China, TSMC has little choice but to offer something to the Americans. After years of delay and resistance, it’s time for TSMC to build a shiny new factory in America. Expect to hear the company announce concrete plans, and large dollar figures for U.S. investment, in the next year or so.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Tim Culpan is a Bloomberg Opinion columnist covering technology. He previously covered technology for Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Regulators are moving to let U.S. companies participate in technology standards-setting bodies alongside Huawei Technologies Co., despite the Chinese firm being blacklisted in the U.S. over security concerns.The Commerce Department is writing a regulation to make clear that restrictions on dealing with Huawei don’t bar involvement in international processes in which the Shenzhen-based maker of telecommunications equipment also is taking part, said two people briefed on the matter.The rule could be released within days for a review by other agencies and may not be final for some time, said the people who asked not to be identified because the change hasn’t been made public.The Commerce Department declined to comment.The Trump administration last year said it would cut off Huawei’s access to crucial American components, and has waged a campaign to get allies to shun the company’s telecom equipment because it is a security risk. Huawei has denied it is a security risk.Standards-setting bodies designate technology to be used widely in manufacturing, for instance ensuring that photos from a Samsung Galaxy phone can be viewed on an Apple iPhone.Tech advocates have said shifting rules have led U.S. companies to shun some standards-setting forums.“Confusing and unclear U.S. policies have inadvertently caused many U.S. companies to lose their seat at the table to competitors from other countries, namely China,” said Naomi Wilson, senior director of policy for the Information Technology Industry Council, a policy group that includes Qualcomm Inc. and Intel Corp. as members. “It is critical that the U.S. Department of Commerce address these ambiguities.”Doug Brake, telecom policy director for the Information Technology and Innovation Foundation, said U.S. companies’ participation “is crucial to making sure American technology is incorporated in basic technology around the world.”Six U.S. senators in an April 14 letter raised the issue, saying they were concerned about “risks to the U.S. global leadership position in 5G wireless technology.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Samsung Group heir Jay Y. Lee's vow to end dynastic succession at South Korea's biggest conglomerate following three generations of Lee family control sparked skepticism on Thursday. "If he really wants to sever the family control of the group, he has to announce how he will offload stocks in Samsung's de facto holding company, Samsung C&T, as Bill Gates sold his stake in Microsoft," Kim Woo-chan, a professor of finance at Korea University Business School, said.
Samsung Group heir Jay Y. Lee's vow to end dynastic succession at South Korea's biggest conglomerate following three generations of family control sparked skepticism in some quarters and worry in others for the future of the country's corporate champions. Lee made the surprise announcement on Wednesday saying he would not pass the company founded by his grandfather in 1938 to his children. Lee's announcement, however vague, sent shockwaves through South Korea's corporate elite, dominated by a handful of families who run business empires known as "chaebol" that wield huge political and economic power Asia's fourth-largest economy.
(Bloomberg) -- Apple Inc. again commanded a majority share of the smartwatch market in the first quarter, when the Covid-19 outbreak encouraged health tracking and drove a 20% rise in shipments.Global smartwatch shipments reached 13.7 million units in the first three months of this year, defying a worldwide slump in consumer electronics arenas such as mobile phones. Apple’s share inched up a percentage point to 55.5%, according to Strategy Analytics.The Apple Watch is seen as one of the key growth drivers for the U.S. company, which has stopped detailing quarterly iPhone shipments as the smartphone market matures. Compal Electronics Inc. and Quanta Computer Inc. are the Cupertino, California giant’s assembly partners for the wearable device, according to GF Securities analyst Jeff Pu.Strategy Analytics notes that Apple achieved its highest market share in two years after shipping 7.6 million units. Samsung Electronics Co. was second with 1.9 million and Garmin Ltd. rounded out the top three with 1.1 million.“We expect global smartwatch shipments to slow sharply in the second quarter of 2020, due to the ongoing Covid-19 pandemic,” said Woody Oh, a director at Strategy Analytics. “However, the second half of this year and beyond will see a decent rebound, as consumers worldwide steadily regain confidence and more retail stores reopen.”Read more: Demand for Health Gadgets Surges in Lockdown, Likely to LastFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Jay Y. Lee, the billionaire scion of Samsung Group, issued a personal apology for his company’s role in a scandal over succession that rocked South Korea and promised not to hand down leadership to his children, signaling he will likely be the last of his family to oversee the country’s most powerful conglomerate.Speaking at a briefing at company headquarters, Lee admitted missteps in the past and pledged he will avoid violations of the law in the future. His promise means that leadership of Korea’s largest conglomerate, which was founded by his grandfather and then led by his father, won’t get passed to a fourth generation.“We are recognized for our top-class technology and products, but the public view of Samsung is still critical,” the 51-year-old said, dressed in a dark suit, white shirt and tie. “This is all because of our shortcomings. This has been my fault and I offer my sincere apology.”Lee has been entangled for years in allegations that he used horses and financial contributions to win favor, via an intermediary, from then-president Park Geun-hye to help with his succession as Samsung chief. The scandal led to Park’s impeachment in 2017 and her sentencing to a 25-year prison term. It also inflamed public anger over the power of the country’s conglomerates, triggering the election of a reformer as her successor. The executive’s apology may help burnish Samsung’s image, which improved after the electronics giant publicized a series of efforts to aid Korea in its battle against Covid-19.The legal fight has disrupted Lee’s tenure at the helm of Samsung Electronics Co., the world’s leading producer of smartphones and memory chips. He became de-facto leader after his father suffered a heart attack in 2014, but he was then imprisoned for about a year until his release in early 2018. Lee returned to court for a retrial last year when the scope of the alleged wrongdoing was revised, and he again faces the possibility of jail.“I give my word here today that from now on, there will be no more controversy regarding succession. There will absolutely be no infringement against the law,” Lee said. “There will be no leaning on legal expediency or actions that cause ethical reproach. My sole focus will be on enhancing the corporate value of Samsung.”Lee’s tone was markedly different from the past. He and Samsung had insisted repeatedly that they had done nothing wrong.”It is symbolic that Korea’s top company will separate ownership from management,” said Park Ju-gun, president at corporate watchdog CEOScore.Lee also apologized for Samsung’s stance against unions, a long-running area of controversy.“At Samsung, the labor culture did not move in step with the times,” he said. “From now on, I will make sure that Samsung is not criticized for ‘union-free management’.”Samsung C&T Corp., the de facto holding company for the Samsung empire, surged 6.6%, well ahead of the Korean market index.”Samsung C&T shares rose on expectations that Lee may not go back to jail again, relieving uncertainties over trial issues,” said Lee Sang-hun, senior analyst at HI Investment & Securities. “Through today’s presser, Lee showed his leadership and sought to boost corporate image.”The appeals court that decided to release Lee is expected to rule on his final sentence in the next few months. Unless new evidence emerges during the retrial, the appeals court is expected to rule in line with the decision of Korea’s Supreme Court, which found Lee had used the horses and money to bribe President Park while seeking political support. This would mean altering Lee’s presently suspended prison sentence.Why the Fate of Samsung’s Billionaire Heir Turns on HorsesThe total amount of alleged bribery determined by the top court carries a minimum sentence of five years, which cannot be suspended in the same way that Lee’s existing sentence had been. Media coverage in Korea, however, has centered on Article 53 of the Korean Criminal Act, which stipulates there could be a discretionary mitigation of the punishment “when there are extenuating circumstances.” In Lee’s case, the damage to Samsung -- crucial as it is to Korea’s economy -- could be presented as grounds to keep him out of prison.Samsung Billionaire Heir to Cede Board Seat Before Legal ProbeLee gave up on extending his three-year term on the Samsung board. Although he’s keeping his title as vice chairman, it will be the board that drives overall management decisions, people familiar with the matter have said.Park of CEOScore said that Lee has been under pressure to apologize and demonstrate contrition after the years of scandal.“Lee himself has been struggling with succession under Korean law,” Park said. “But today’s announcement was weak. He didn’t say he’d take away the Lee family ownership at Samsung.”(Updates with outside comment from eighth paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.