Samsung met numerous difficulties because of being held between the Korean-Japanese trade war - Photo 1.

Samsung met numerous difficulties because it was caught between the Korean-Japanese trade war


Samsung is facing many threats, especially the impact of Japan's export ban on its casting business. This is the most important and core business segment, supporting Samsung's chip business.

With the Japanese government restricting the export of contrast material used in ultraviolet etching technology (EUV), Samsung's casting plants will lack serious materials. It is worth mentioning that these materials are very difficult to find alternative sources at this time.

The reason why Samsung is so worried is because it has a series of cooperation with big customers such as IBM, Nvidia, Qualcomm and Intel. If Samsung cannot meet the supply of chips for its partners, it will lose a lot of lucrative contracts. More dangerous, Samsung may miss its goal of becoming the industry's largest chip maker by 2030. Earlier, it invested about $ 113 billion in chip research and production for 10 years. .

Samsung is facing difficulties in many industries, from memory chips to smartphones, consumer electronics and biotechnology. Samsung's profit in Q2 / 2019 is expected to fall by more than half compared to the same period last year, equivalent to a reduction of 56% and only profit of 5.56 billion USD. Meanwhile, revenue also decreased by 4% to USD 47.8 billion.

To partly solve the problem, Samsung recently announced plans to increase the price of NAND and DRAM flash memory chips by 10%. But that is certainly not a long-term solution because Samsung's rivals like Micron Technology or Toshiba will be wary of the fact that Samsung is struggling to lower chip prices and earn more contracts.

Samsung encountered numerous difficulties because of being held between the Korean-Japanese trade war - Photo 2.

The Samsung side had been very active in expanding business opportunities in Japan in the context of an unfinished US-China trade war. However, all efforts by Samsung are now negatively affected by political and diplomatic issues between Seoul and Tokyo.

Meanwhile in Korea, the Samsung BioLogics bio-industry division is under investigation. Local officials accuse the company of accounting fraud and scale investigations being conducted.

Samsung Group of course is infected by the incident. So far at least 8 employees and executives of Samsung Electronics and Samsung BioLogics have been jailed, including those in the business and cooperation team. Vice President Samsung Lee Jae-yong recently mentioned the uncertain future of this group.

Responding to Samsung and many other local South Korean businesses are criticizing the government for hindering their businesses and not worrying about dealing with Japan's retaliation.

Analysts are very pessimistic about Samsung's growth prospects and they do not know when the new wave will be quiet so that the Samsung boat continues to move forward more smoothly.

Refer to BusinessKorea


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