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- Samsung E&A Proves Profitability Amid Unexpected Challenges, Namkoong Hong to Sustain Growth Trend
- [Business Post] Samsung E&A Demonstrates Strong Competitiveness in Petrochemical Plant Construction with Record Performance Last Year
The impressive performance in 2024 has highlighted the strengths of Namkoong Hong, CEO of Samsung E&A, who is regarded as a "petrochemical expert." In his second year as CEO, Namkoong has proven his expertise, and it is anticipated that he will continue to grow Samsung E&A’s profits this year, leveraging the success of the petrochemical division.
On January 21, insights from the securities and construction industries suggested that Samsung E&A demonstrated high profitability in its petrochemical plant construction business (petrochemical division) through its 2024 performance.
Samsung E&A’s consolidated sales for 2024 were estimated at KRW 9.97 trillion (US$ 7.19 billion), with an operating profit of KRW 971.6 billion (US$ 701 million). These figures represent a decrease of 6.2% in sales and 2.2% in operating profit compared to the previous year, yet operating profit significantly exceeded the initial targets.
Jang Moon-jun, an analyst at KB Securities, noted in a report, "While sales were in line with market expectations, operating profit far exceeded projections."
This performance is particularly notable as Samsung E&A overcame unusual challenges during the year.
Just before the Q4 earnings announcement, Samsung E&A disclosed a bond call (performance bond claim) for the Thai "Thai Oil Clean Fuel Project," which resulted in an expense of KRW 146.4 billion (US$ 105.6 million) being recorded as a non-operating loss in the Q4 results.
A bond call occurs when a financial institution guarantees payment to the project owner due to a contractor’s contractual breach. Such incidents, stemming from project delays or cost increases, are rare but can lead to significant losses for the contractor.
A Samsung E&A representative explained, "As several projects span multiple years, interim profits have been recognized. Despite the one-time cost from the Thai project bond call, the profitability of petrochemical projects helped achieve solid results."
Namkoong is expected to focus on enhancing profitability through the petrochemical division, continuing the positive earnings trend this year.
Samsung E&A’s performance is primarily divided into petrochemical and non-petrochemical divisions. However, as of September 2023, 78% of the backlog in the non-petrochemical division comprised orders from affiliates such as Samsung Electronics and Samsung Biologics.
Given the geopolitical uncertainties and intensified competition faced by Samsung Group, expanding non-affiliate orders and revenue in the petrochemical division has become increasingly critical for Samsung E&A.
Namkoong also appointed a financial expert as the new CFO to strengthen profitability this year. Until 2023, CFO Kim Dae-won, who came from a non-financial background, held the position. In 2024, Yoon Hyung-sik, a finance and planning expert who served as Manager and Team Leader in the Strategic Planning Team, took over as CFO.
Namkoong is expected to maximize Samsung E&A’s strengths in the overseas plant market to minimize the impact of the domestic construction downturn.
According to the International Contractors Association, Samsung E&A secured contracts worth US$ 12.40 billion (KRW 17.69 trillion) overseas in 2023, double the amount of second-place Hyundai Engineering, which secured US$ 6.04 billion.
However, the inherent profit volatility of Samsung E&A’s business model, influenced by regional conditions, remains a challenge. Uncertainty surrounding petrochemical plant contracts is particularly significant.
Notably, the highly anticipated Saudi Arabia Alujain Project and Indonesia TPPI Project have not advanced beyond the early FEED (Front-End Engineering Design) phase to the EPC (Engineering, Procurement, Construction) phase. Additionally, in November 2023, Samsung E&A’s KRW 1.9 trillion (US$ 1.37 billion) project in Algeria, awarded in 2020, was canceled.
Kim Sun-mi, an analyst at Shinhan Investment, commented, "There is considerable variance in performance forecasts for Samsung E&A across securities firms due to differing views on the sustainability of petrochemical division profitability."
Despite these challenges, Samsung E&A remains optimistic, stating, "Uncertainties such as Donald Trump’s presidency and the strong dollar will likely have limited impact, and we expect to continue our profitability growth this year."
Namkoong, an engineer with over 30 years of experience at Samsung E&A, is recognized as a "petrochemical plant expert."
He previously served as Senior Executive Director and Executive Director for Samsung Engineering’s (now Samsung E&A) SEUAE office in the Middle East, where he played a significant role in improving profitability during a period of low-margin overseas contracts.
Before becoming CEO in January 2023, he was Executive Vice President and Head of the Plant Business Division from 2020.
#SamsungE&A #NamkoongHong #petrochemicalplants #constructionindustry #financialresults #bondcall #globalprojects #Koreanbusiness #profitability #engineeringexpert
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- Will SK Hynix Surpass Samsung in Operating Profit? Kwak Noh-jung Widens HBM Lead
- SK Hynix is drawing attention as it may surpass KRW 33 trillion (US$ 23.8 billion) in operating profit in 2025, potentially claiming the title of Korea's most profitable company.
SK Hynix is projected to achieve a record quarterly operating profit of over KRW 8 trillion (US$ 5.8 billion) in Q4 2024, surpassing Samsung Electronics among Korean companies.
Kwak Noh-jung, CEO of SK Hynix, plans to focus on increasing market share and extending technological leadership by starting mass production of the world’s first fifth-generation HBM, the "HBM3E 16-layer," in the first half of this year.
According to FnGuide on January 21, SK Hynix’s Q4 2024 market consensus (average forecast by securities firms) is estimated at consolidated sales of KRW 19.71 trillion (US$ 14.2 billion) and operating profit of KRW 8.01 trillion (US$ 5.8 billion).
This figure significantly surpasses the KRW 6.5 trillion (US$ 4.7 billion) in operating profit that Samsung Electronics reported in early January 2024 and is more than KRW 5 trillion (US$ 3.6 billion) higher than the KRW 3 trillion (US$ 2.2 billion) estimated for the semiconductor division of Samsung Electronics DS.
In annual terms, SK Hynix is estimated to have achieved KRW 23.4 trillion (US$ 16.9 billion) in operating profit for 2024, compared to Samsung Electronics’ estimated KRW 34.8 trillion (US$ 25.2 billion).
SK Hynix is set to announce its Q4 2024 earnings on January 23.
Jung Min-kyu, an analyst at Sangsanin Securities, commented, “Despite continued declines in general-purpose memory semiconductor prices, increased HBM shipments and a reduced share of DDR4 in 2024 likely raised the average selling price (ASP) of DRAMs by 3% quarter-on-quarter. The HBM share of DRAM sales may have reached 42% in Q4.”
Speculations suggest that SK Hynix’s annual operating profit could surpass Samsung Electronics’ total operating profit across all business units this year.
Delays in Nvidia's approval for Samsung Electronics’ HBM3E products may extend SK Hynix’s dominance in HBM this year. Nvidia is expected to start sourcing Samsung’s HBM3E 12-layer products only by Q3 2024.
Meanwhile, SK Hynix’s HBM sales are projected to account for nearly 50% of its total DRAM sales this year.
Consequently, SK Hynix’s 2025 operating profit is forecasted to increase by approximately 43% to KRW 33.6 trillion (US$ 24.3 billion), approaching Samsung Electronics’ projected operating profit consensus of KRW 35.37 trillion (US$ 25.6 billion). However, if DRAM and NAND flash markets worsen and losses from Samsung Electronics’ Foundry and System LSI divisions widen, Samsung’s profit may fall short of projections, allowing SK Hynix to surpass it.
Some suggest that delays in Nvidia’s production of its new AI chip, "Blackwell," may negatively impact SK Hynix’s earnings this year. However, most analysts believe the impact will be minimal due to strong demand for existing HBM3E 12-layer products.
Han Dong-hee, an analyst at SK Securities, predicted, “SK Hynix may face a temporary decline in profits in Q1 due to delays in Nvidia’s new AI semiconductor production. However, given the annual contract structure for HBM, strong shipments will resume in the latter half of the year.”
The start of mass production of the HBM3E 16-layer product is expected to further widen SK Hynix’s market lead over competitors.
At the "SK AI Summit 2024" held in November 2023 in COEX, Seoul, Kwak Noh-jung said, “We will provide HBM3E 16-layer samples to customers early next year,” adding that the product incorporates advanced "Mass Reflow Molded Underfill (MR-MUF)" technology validated in the HBM3E 12-layer.
MR-MUF involves filling spaces between stacked chips with liquid protective material, enhancing production speed and reducing defects.
Compared to its predecessor, the HBM3E 16-layer improves AI training performance by up to 18% and inference performance by up to 32%.
Micron is expected to begin mass production of HBM3E 16-layer products later this year, while Samsung Electronics focuses on supplying HBM3E 12-layer products to Nvidia, with 16-layer mass production expected to take longer.
Industry observers believe that companies leading in HBM3E 16-layer production may secure competitive advantages in the next generation, HBM4, as the 16-layer product will be its primary application.
For HBM4, Kwak is reportedly considering applying MR-MUF technology to the 16-layer product and adopting hybrid bonding packaging for 20-layer and higher products.
Hybrid bonding eliminates the use of "bumps" to connect chips, significantly reducing chip thickness. It enables the stacking of HBM products beyond 20 layers.
SK Hynix’s HBM profits for 2024 are expected to more than double compared to last year.
Lee Min-hee, an analyst at BNK Investment & Securities, noted, “Taiwan’s TSMC’s HBM demand this year is nearly double SK Hynix’s production capacity. Considering competitors not included in Nvidia’s supply chain, SK Hynix will maintain high profitability in the HBM segment. HBM profits are estimated at KRW 7 trillion (US$ 5.1 billion) in 2024 and projected to reach KRW 15 trillion (US$ 10.8 billion) this year.”
#SKHynix #HBM #AIsemiconductors #semiconductorindustry #KwakNohJung #Nvidia #DRAM #profitforecast #techleadership #SamsungElectronics
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- Chung Mong-koo Sowed the Seeds, Chung Eui-sun Reaps: Hyundai Targets India with Three-Wheel EVs
- Chung Mong-koo, Honorary Chairman of Hyundai Motor Group, sowed the seeds in the Indian market more than 20 years ago. Now, his son, Chung Eui-sun, Chairman of Hyundai Motor Group, is preparing to reap the benefits.
Hyundai Motor plans to accelerate its expansion in India, a market identified by Chung Eui-sun as a core future growth area, by launching ultra-compact three- and four-wheel electric vehicles locally.
According to reports from the automotive industry on January 20, 2025, Hyundai Motor will introduce ultra-compact three- and four-wheel electric vehicles in India within the year as the adoption of three-wheel electric vehicles has rapidly increased in the market.
Hyundai Motor recently announced this plan during a vision presentation held in Delhi, India.
India emerged as the world’s largest market for three-wheel electric vehicles in 2023. While China held the top spot until 2022, India overtook it in 2023.
According to the International Energy Agency’s (IEA) Global Electric Vehicle Outlook, China’s three-wheel electric vehicle sales in 2023 declined by 8.7% from the previous year to approximately 300,000 units. During the same period, sales in India surged by 65.7% to around 600,000 units, making it the largest market. Approximately 20% of all three-wheelers sold globally in 2023 were electric, with 60% of these sold in India.
Hyundai Motor India was established in May 1996 during the tenure of former Chairman Chung Se-young. However, it was Honorary Chairman Chung Mong-koo who laid the foundation and cultivated the challenging Indian market.
The first car from Hyundai Motor India was launched in September 1998, and Chung Mong-koo became the Chairman of Hyundai Motor Group in March 1999.
In 1998, Hyundai Motor India’s sales stood at approximately 8,400 units with no exports. By 1999, sales had risen to about 18,000 units, with 20 units exported. From 2000, the company experienced significant growth, with sales reaching approximately 83,000 units and exports nearing 4,000 units.
India is a crucial strategic market for Chairman Chung Eui-sun. Not only is it the third-largest automobile market globally, but it is also a key future market identified by Chung for intensive focus.
The rapidly growing Indian automobile market is currently a battleground for automakers worldwide. Hyundai’s strategy to introduce ultra-compact three- and four-wheel electric vehicles tailored for India will be pivotal in determining how much it can increase its market share.
If these ultra-compact electric vehicles are well-received in the market, they could boost Hyundai’s electric vehicle share and overall market share in India.
Currently, the leading player in the Indian automotive market is Maruti Suzuki, a Japan-India joint venture, with a market share of 41.6% as of 2023. Hyundai follows in second place with a 14.3% share.
Since Maruti Suzuki has not yet ventured into electric vehicles, Hyundai’s strategy of introducing ultra-compact EVs in India could significantly enhance its sales.
According to the Korea Trade Association’s New Delhi office, India’s electric vehicle sales reached 1.94 million units last year, a 26.5% increase compared to 2023.
Hyundai plans to produce EVs tailored to the Indian market this year and aims to complete facilities capable of producing more than 1 million vehicles annually.
Meanwhile, the Indian government has been attracting investment from major global automakers since last year. It offers policies such as reducing import tariffs on electric vehicles to 15% for companies investing at least USD 500 million in India and starting EV production within three years.
#HyundaiMotor #India #ChungEuiSun #ElectricVehicles #ThreeWheelEVs #FourWheelEVs #IndianMarket #MarutiSuzuki #AutomotiveIndustry #HyundaiIndia
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- Samsung C&T Eyes Jamsil Useong After Hannam, Can Oh Se-chul Sustain Momentum?
- Oh Se-chul, the President and CEO of Samsung C&T Corporation’s Construction Division, gained momentum in expanding the company’s urban redevelopment strategy this year by securing a victory against Hyundai Engineering & Construction in the bidding war for the Hannam District 4 project.
The next major battleground for Oh is expected to be the Jamsil Reconstruction Project. If he wins this project as well, it will further solidify his position as a key player in the urban redevelopment market.
According to construction industry sources on January 20, 2025, the Jamsil Useong 1, 2, and 3 Complex Reconstruction Project has been identified as the next major focal point in the domestic urban redevelopment market following Hannam District 4.
The Hannam District 4 project, with construction costs of approximately KRW 1.6 trillion (around USD 1.15 billion), was the first project exceeding KRW 1 trillion (USD 718 million) to select a contractor this year.
The competition between Samsung C&T and Hyundai Engineering & Construction, the top two companies in the industry, attracted significant attention as it marked their first face-off in 17 years. Samsung C&T ultimately emerged victorious, giving Oh his first large-scale project worth over KRW 1 trillion for 2025.
The next domestic urban redevelopment project with construction costs exceeding KRW 1 trillion is the Jamsil Useong 1, 2, and 3 Complex Reconstruction Project.
This project involves reconstructing 29 buildings with 1,842 households, originally completed in 1981, into 2,680 households, with total construction costs estimated at KRW 1.7 trillion (approximately USD 1.22 billion).
Samsung C&T is expected to participate in the bidding for the Jamsil project, alongside GS Engineering & Construction, which is also highly likely to join.
The initial bidding for the Jamsil project began in September 2024, but GS Engineering & Construction was the sole participant, causing the bidding to fail. A competitive re-bid is now underway.
Since late 2024, Samsung C&T has been signaling its intention to participate by placing Raemian advertisements near the project site.
The bidding for the Jamsil project closes on March 4, 2025, with the contractor expected to be selected in April.
For Oh, the Jamsil project is as critical as Hannam District 4. With its location in the core Gangnam area and its large scale, it is essential for continuing the momentum of Samsung C&T's urban redevelopment expansion.
If Samsung C&T secures both the Hannam District 4 and Jamsil projects, the combined value of these projects will reach KRW 3.3 trillion (approximately USD 2.37 billion), nearly matching Samsung C&T’s 2024 urban redevelopment achievements of KRW 3.6398 trillion (USD 2.61 billion).
The rivalry with GS Engineering & Construction further intensifies the significance of the Jamsil project. GS Engineering & Construction announced its renewed focus on urban redevelopment with the relaunch of its Xi brand in November 2024, making the Jamsil project its first attempt at securing a major project in the Gangnam area.
Last year, Hyundai Engineering & Construction and POSCO E&C ranked first and second in domestic urban redevelopment orders, with Samsung C&T and GS Engineering & Construction following in third and fourth place, respectively. GS Engineering & Construction achieved orders worth KRW 3.1098 trillion (approximately USD 2.23 billion), about KRW 500 billion (USD 358 million) less than Samsung C&T.
Continuing to achieve success in the urban redevelopment market holds special significance for Oh personally.
Oh, recognized for his expertise in overseas and plant projects, was appointed as the head of Samsung C&T’s Construction Division. Around the time of his appointment in 2021, there were even rumors of Samsung C&T withdrawing from the domestic housing market. Under Oh’s leadership, most of the company’s achievements initially came from overseas and plant orders.
However, with the domestic construction market facing a downturn, major construction companies have been shifting focus to the urban redevelopment market, resulting in more frequent head-to-head competition.
Oh’s victory in Hannam District 4 marked his first success in a competitive bid since taking office. The fact that his opponent was Hyundai Engineering & Construction, which had held the top position in urban redevelopment for six consecutive years, added to the significance.
If Oh manages to win the Jamsil project, another multi-trillion-won site in the core Gangnam area, against GS Engineering & Construction, it will further strengthen Samsung C&T’s position as a dominant force in the urban redevelopment market.
A Samsung C&T representative stated, “Our urban redevelopment target for this year will exceed last year’s. Given the prime location of the Jamsil Useong 1, 2, and 3 project, we are actively reviewing our participation.”
#OhSeChul #SamsungC&T #UrbanRedevelopment #Hannam4 #JamsilReconstruction #Raemian #HyundaiE&C #GSConstruction #ConstructionIndustry #Gangnam
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- Samsung’s “Galaxy S25 Unpacked” Just Two Days Away: Roh Tae-moon Highlights “Soft Power” with Galaxy AI
- Roh Tae-moon, the President and Head of Samsung Electronics' Mobile eXperience (MX) Division, is expected to highlight advanced AI features and software power instead of focusing on hardware performance upgrades at the “Galaxy S25 Unpacked” event in San Jose, USA, on January 22 (local time).
The new Galaxy AI will integrate with Google’s “Gemini,” enabling it to share information from YouTube videos viewed, provide automatic text summaries, and analyze night photography scenes to capture the best images without user intervention.
Additionally, Bixby, which previously had limited utility due to its inability to understand complex commands, is anticipated to be unveiled as an AI agent capable of engaging in natural conversations following a major update. Samsung’s new mobile operating system, “One UI 7,” will be introduced as a comprehensive platform incorporating various AI features.
According to the smartphone industry on January 20, Samsung Electronics is planning an Unpacked event centered on software rather than hardware.
The Galaxy S25 series will be unveiled at the Galaxy Unpacked event on January 23 at 3 p.m. (KST) in San Jose, USA. There are also expectations that the physical version of the XR device “Project Moohan,” developed with Google and Qualcomm, will be showcased.
However, several foreign media outlets predict that the focus of the event will be on software such as Galaxy AI, Bixby, and One UI 7. In particular, the enhanced Galaxy AI is expected to demonstrate performance improvements that surpass hardware upgrades.
The Galaxy S25 Ultra reportedly features a 200MP main camera, a 12MP ultra-wide-angle camera, a 50MP periscope camera with 5x optical zoom, and a 10MP telephoto camera with 3x optical zoom, similar to the Galaxy S24 Ultra.
The Galaxy S25 Ultra is said to use “All Lenses on Prism (ALoP)” technology to improve portability and minimize protruding cameras, though its performance is expected to remain similar to its predecessor.
The enhanced Galaxy AI, however, is expected to provide a completely new camera experience.
According to a recent leaked video of the Galaxy S25 by the U.S. IT media Android Headlines, the improved Galaxy AI includes a “Nightography” feature that enables natural video and photo capture at night. Previously reliant on camera hardware for night photography, the new Galaxy AI achieves this through software alone.
Additionally, Galaxy AI is expected to feature an “Audio Eraser” function, which allows users to isolate desired voices and remove unwanted background noise from recorded videos. For example, it can make a user’s voice clear in noisy environments.
The integration of Galaxy AI with Google’s generative AI, Gemini, is also being strengthened.
According to Brazilian IT media outlet Techblog, Gemini extensions will be available for Samsung apps like Notes, Calendar, and Reminders. These extensions will allow users to save viewed YouTube videos as text in Samsung Notes, search for locations shown in videos, and automatically manage schedules based on user information registered on the smartphone.
A leaked Galaxy S25 video demonstrated an example where a user says, “Find a pet-friendly Italian restaurant nearby and text Tony about it.” Gemini then identifies a suitable restaurant, drafts a message, and displays options to “Edit” or “Send.”
The Galaxy AI is also expected to be integrated into the “Now Bar” function, which manages smartphone notifications. Now Bar provides weather updates, commute information, recipes, remaining coupon time, driving safety tips, and sleep data.
Additionally, the official version of Samsung’s mobile OS, One UI 7, which was released as a beta version late last year, will be unveiled at the Galaxy Unpacked event. One UI 7, reportedly spearheaded by Roh, has received positive reviews from many international IT media outlets.
The U.S. IT media outlet SamMobile described One UI 7 as “one of the most ambitious releases in recent years, possibly the best ever.” Samsung Electronics introduced One UI 7 and Galaxy AI as “the first AI-integrated platform.”
Samsung’s AI assistant, Bixby, is also set to receive a significant update. Some predict that Bixby will be a key feature of this Galaxy Unpacked event. It is expected to achieve a natural conversation level by utilizing the company’s generative AI “GAUSS2,” released late last year.
Bixby, launched in 2017 to compete with Apple’s “Siri,” has been criticized for its low usage rates. However, the updated Bixby, unlike the on-device AI of the Galaxy S24, will leverage Samsung Electronics’ large language model (LLM) “GAUSS2” via cloud services to provide significantly enhanced AI capabilities.
Performance upgrades to enable smooth use of AI software features are also planned. All Galaxy S25 models will be equipped with Qualcomm’s Snapdragon 8 Elite mobile application processor (AP) and at least 12GB to 16GB of RAM.
Roh is expected to use the launch of the Galaxy S25 series to solidify Samsung’s position as the world’s number one smartphone brand. According to market research firm Counterpoint Research, Samsung Electronics maintained its lead with a 19% market share in shipments in 2024, surpassing Apple (18%).
Apple is facing a significant decline in sales in China, which accounts for 20% of its total revenue. According to market research firm Canalys, Apple’s iPhone shipments in China last year decreased by 17% compared to the previous year.
Samsung Electronics aims to increase its shipment target even further. The company is estimated to have shipped 227.2 million smartphones last year, with this year’s target set at 230 million units, 10 million more than Apple’s forecasted shipment of 220 million units.
Meanwhile, Samsung Electronics is also expected to reveal the physical version of the XR device “Project Moohan,” developed in collaboration with Google and Qualcomm. Google introduced the “Android XR” platform and the first device, Project Moohan, at the “XR Unlocked” event on December 13 last year.
#Samsung #GalaxyS25 #AI #UnpackedEvent #Bixby #OneUI7 #ProjectMoohan #Snapdragon8Elite #Smartphones #GeminiAI
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- ARM Fee Hike and In-House AP Put Samsung Exynos at Risk, Focus on Lee Jae-yong and Son Masayoshi
- ARM, led by Son Masayoshi, Chairman of SoftBank, is reportedly planning to quadruple semiconductor license fees and develop its own mobile application processors (AP). This has raised concerns that Samsung Electronics’ AP business, ‘Exynos,’ which heavily relies on ARM technology, may face an even deeper crisis.
As a result, attention is focused on the strategic decisions of Samsung Electronics Chairman Lee Jae-yong, who shares a close relationship with Son. Lee is expected to negotiate with ARM to improve relations, possibly by increasing investment or enhancing foundry (contract manufacturing) collaboration.
According to information gathered from the semiconductor industry on January 17, Son Masayoshi, ARM’s largest shareholder, is expected to seek new avenues following ARM’s loss in an AP license lawsuit against Qualcomm.
In 2022, ARM filed a lawsuit claiming that Qualcomm, through its acquisition of the semiconductor company Nuvia, used ARM’s technology in its AP designs, violating intellectual property rights. However, at the end of last year, a jury in the U.S. District Court in Delaware ruled that Qualcomm had not infringed ARM’s licenses, effectively marking a loss for ARM.
While Son is expected to appeal the ruling, most experts believe the chances of overturning the decision are slim. Although the loss could weaken ARM’s market influence, Son is anticipated to pursue aggressive measures to improve ARM’s profitability.
Reuters reported that Son is strongly determined to increase ARM’s license fees, considering the company’s profitability too low despite having major global semiconductor companies as clients.
Documents and testimony from the lawsuit indicate that ARM has already considered raising license fees by up to fourfold and developing its own APs. These plans are reportedly part of ARM’s ‘Picasso Project,’ aimed at increasing intellectual property (IP) revenue from smartphone processors to $1 billion (KRW 1.4 trillion) over the next decade.
If ARM implements this project, Samsung Electronics’ Exynos AP business could be severely impacted due to a lack of alternatives to ARM’s technology. ARM currently holds a monopoly in the AP design market, with a market share of around 90%.
Moreover, Exynos, which has been used in Samsung smartphones to enhance cost competitiveness, may face cost increases due to higher ARM license fees, indirectly affecting the performance of the Mobile Experience (MX) division. Some even speculate that the Exynos development itself might be canceled.
Due to yield issues with Exynos 2500, it will not be included in the Galaxy S25 series, which will exclusively use Qualcomm’s AP, the ‘Snapdragon 8 Elite.’
Chairman Lee Jae-yong’s role in addressing ARM-related challenges is expected to be pivotal. Leveraging his close relationship with Son, Lee is likely to engage in strategic negotiations to secure favorable license terms and maximize Samsung Electronics’ interests.
Lee and Son have regularly met at the annual ‘Sun Valley Conference,’ a global private CEO gathering held every July, and are said to share a strong personal rapport, even occasionally meeting for golf.
Lee might negotiate to have ARM’s AP manufacturing handled by Samsung’s foundry. Samsung’s foundry business has faced challenges in securing customers for sub-3nm ultra-fine processes, and a partnership with Son could result in mutual benefits.
There is also speculation that Samsung Electronics might increase its strategic investment in ARM to strengthen collaboration and create synergies in emerging semiconductor markets such as artificial intelligence (AI), the Internet of Things (IoT), and autonomous driving. ARM’s low-power architecture and scalability are becoming increasingly critical in these fields.
ARM’s Cortex-A CPU cores, widely used in autonomous vehicles, integrate real-time processing of images, sensor data, and machine learning algorithms, making them essential for electric vehicle (EV) and system semiconductor development. Samsung Electronics, which is actively developing automotive semiconductors, could benefit significantly from collaborating with ARM.
ARM’s Ethos neural processing units (NPUs) for AI semiconductors can efficiently handle deep learning models needed for autonomous vehicles and home IoT devices. Additionally, the Cortex-M series, designed for EVs and IoT devices, enhances power efficiency, making it ideal for AI appliances requiring long battery life.
As of late November 2022, Samsung Electronics had KRW 43.13 trillion (USD 31.1 billion) in cash and cash equivalents and KRW 60.61 trillion (USD 43.7 billion) in short-term financial instruments, providing a total investment capacity of KRW 103 trillion (USD 74.8 billion).
Son visited South Korea in October 2022 to propose a long-term collaboration between Samsung Electronics and ARM, even suggesting the potential sale of ARM to Samsung Electronics. However, it was reported that Lee ultimately declined the offer.
An industry insider commented, “It remains to be seen whether Chairman Lee will directly negotiate with Son. For now, we’ll have to observe how ARM approaches Samsung Electronics.”
#ARM #SamsungElectronics #LeeJaeyong #SoftBank #SonMasayoshi #semiconductor #Exynos #Snapdragon #foundrybusiness #AIchips
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- GS E&C Kicks Off Urban Redevelopment Wins Early, Huh Yoon-hong’s 'New Xi' Faces Test at Jamsil Woosung
- GS Engineering & Construction (GS E&C) is on the verge of securing two urban redevelopment projects it bid for solo in January, potentially signaling an earlier start to its winning streak compared to last year.
Huh Yoon-hong, the President and CEO of GS E&C, is gearing up for a key battle in the redevelopment of the upscale Jamsil Woosung Apartment complex. The competition with Samsung C&T’s Raemian brand is expected to test the competitiveness of the ‘New Xi’ brand, introduced last year.
According to sources in the urban redevelopment industry on January 17, GS E&C is close to being selected as the contractor for the public redevelopment of Seoul Jungnang-gu Junghwa District 5 and the redevelopment of Suyeong District 1 in Busan.
GS E&C has been chosen as the preferred negotiation partner for both projects, which it bid for solo. Both projects are set to hold contractor selection general meetings on January 18.
The public redevelopment of Junghwa District 5 involves constructing 1,610 residential units in 14 buildings, ranging from two underground floors to 35 above-ground floors, along with community facilities on a site of 71,465㎡ in Jungnang-gu, Seoul. The total estimated project cost is KRW 649.8 billion (USD 468.4 million).
The Suyeong District 1 redevelopment project will create 1,520 residential units in 12 buildings, ranging from three underground floors to 42 above-ground floors, along with community facilities on a site of 84,501㎡ in Suyeong-gu, Busan. The estimated total project cost is KRW 770 billion (USD 555.4 million).
Compared to 2024, when GS E&C secured its first project in April, the company appears to be picking up pace in urban redevelopment project bids this year.
In 2024, GS E&C kicked off its urban redevelopment efforts in April with the KRW 390 billion (USD 281.3 million) redevelopment project for Minrak District 2 in Busan.
In contrast, in 2023, GS E&C started strongly by securing over KRW 1 trillion (USD 721.0 million) in urban redevelopment projects by April, before halting new bids following the Gimpo Geomdan accident. The company ended the year with annual orders worth KRW 1.5878 trillion (USD 1.14 billion), ranking sixth in the construction industry.
GS E&C had ranked second in the urban redevelopment sector for two consecutive years, with KRW 5.1437 trillion (USD 3.71 billion) in 2021 and KRW 7.1476 trillion (USD 5.15 billion) in 2022, before its ranking dropped significantly.
However, the company rebounded in 2024, surpassing KRW 3.1 trillion (USD 2.24 billion) in orders, ranking fourth in the industry, and regaining momentum.
In November 2024, Huh spearheaded the rebranding of the ‘Xi’ brand after 22 years, focusing on restoring customer trust.
During the Xi rebranding event, ‘Xi Reignite,’ in November 2024, Huh stated, “The rebranding of Xi is not just a cosmetic change but a foundation for strengthening our core. We will do our utmost to create residential environments where customers can be happier through innovative technologies and services.”
In urban redevelopment, brand value significantly influences project selection, raising interest in whether Huh’s ‘New Xi’ brand will yield results against major construction competitors this year.
Last year, Huh also detailed strategies to strengthen internal management, restructuring the organization by reducing the number of business divisions from six to three, with a focus on the construction and housing business division.
The redevelopment of the Jamsil Woosung Apartment complex is seen as a major test for the revamped Xi brand. GS E&C has put considerable effort into securing this project.
The redevelopment involves constructing 2,616 residential units and community facilities in 12 buildings, ranging from three underground floors to 35 above-ground floors, on a site of 120,354.2㎡ in Jamsil-dong, Songpa-gu, Seoul. The total project cost is estimated at KRW 1.6 trillion (USD 1.15 billion).
The site is located near Jamsil Sports Complex Station, which connects subway lines 2 and 9, and boasts high value due to its proximity to prestigious schools such as Jeongsin Middle and High Schools and Whimoon High School.
The Jamsil Woosung Apartment Redevelopment Association plans to close bidding on March 4 and select a contractor at the general meeting in April.
GS E&C’s last major project battle was in September 2024, when it secured the Garak Plaza redevelopment project after a year-long competition with Hyundai Engineering.
This year, GS E&C faces competition from Samsung C&T, the industry’s leading construction company, and last year’s third-ranked urban redevelopment contractor. Samsung C&T has expressed its intent to bid, positioning Jamsil Woosung as its first Raemian-branded project in the Jamsil area.
A GS E&C representative stated, “The Jamsil Woosung 1, 2, and 3 complexes have long been a focus for our company. Although our solo participation last year led to a failed bid, we are doing everything we can to secure this project.”
#GSConstruction #urbanredevelopment #HuhYoonhong #XiBrand #JamsilWoosung #constructionindustry #SouthKorea #BusanRedevelopment #SongpaRedevelopment #realestateprojects
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- Shinhan Financial’s Jin Ok-dong and His 'Philosophical Instinct': A Heavier Financial 'Why' Inspired by Cicero
- “Let us strive toward purpose ('why'), not just goals ('what').”
Jin Ok-dong, Chairman of Shinhan Financial Group, presented 'purpose' as a central theme during the '2025 Shinhan Management Forum' town hall meeting held last week, providing direction for the 2025 management strategy to group CEOs and executives.
Chairman Jin stated, “Goals represent what to do, while purpose explains why it must be done. If all members resonate with the purpose, we can move closer to becoming the top-tier Shinhan.”
This was the first time in three years that Chairman Jin publicly emphasized 'why.'
In January 2022, when he was the CEO of Shinhan Bank, Jin introduced Simon Sinek's book 'Start with Why' to executives during a workshop, urging change.
At the time, Jin explained, “Focusing only on 'what' helps convey features but fails to inspire. Starting with 'why' touches emotions, leading naturally to 'how' and 'what,' which translates into action.”
The 'why' Jin refers to in finance is the 'driving force for creating a better society.'
This focus on 'purpose' was evident in both the book he selected for executives to read in preparation for the '2025 Shinhan Management Forum' and his New Year’s address.
During the forum, Chairman Jin and the executives read and discussed Cicero's 'De Officiis (On Duties).'
Shinhan Financial Group's press release captured the atmosphere of the forum:
“In 'De Officiis,' Cicero emphasizes that members of society should fulfill their duties, pursue excellence, and prioritize the community's interests over personal gain. Participants, who had been studying this book for two months in preparation for the forum, engaged in lively discussions about the virtues of great leaders and shared their personal resolutions.”
Chairman Jin also set 'Humanitas' (human duty) and 'Communitas' (community) from Cicero’s 'De Officiis' as the group’s management slogans for the year, advocating for excellence based on human duty to benefit the community.
Another book chosen by Chairman Jin for the forum was 'To Be Honest' by global management consultant Ron Carucci.
The author, who conducted 210 organizational assessments, 3,200 interviews, and 15 years of longitudinal research, concluded that sustainable corporate growth requires an honest organization built on 'purpose,' 'truth,' and 'justice.'
This aligns with Chairman Jin’s longstanding philosophy emphasizing 'justice.'
Known for his love of books, Chairman Jin has even translated a book himself. During his tenure as CEO of Shinhan Bank, he translated a book under a pseudonym titled 'The Conditions for a Just Market.'
This year, his decision to emphasize 'why' for the first time in three years, while drawing on ancient philosophy to stress human dignity, aligns with his prioritization of 'justice' and 'honesty,' potentially reflecting the group’s focus on strengthening internal controls.
In October 2022, Shinhan Investment Corporation suffered a financial incident involving losses of KRW 130 billion (USD 93.74 million) from futures trading unrelated to its ETF liquidity provider operations.
At the time, calls for stronger internal controls were intensifying across the financial sector, with one of the heads of South Korea’s four major financial holding companies even summoned as a witness for a parliamentary audit.
Following the incident, Chairman Jin admitted during a press briefing in Hong Kong that although the loss amount was relatively small, he was deeply shocked by the event.
In his New Year’s address this year, Chairman Jin once again prioritized internal controls.
“Although we focused heavily on internal controls last year, we fell short of meeting the expectations of customers and society. We will establish effective internal controls,” he said.
Observers note that the gravity of Chairman Jin’s emphasis on 'justice' and 'why' has increased compared to three years ago.
Previously, he only needed to lead Shinhan Bank. Now, he is responsible for Shinhan Financial Group as a whole.
Chairman Jin has expressed his readiness to lead once again.
During the town hall meeting, he told executives, “The true influence of a leader stems from respect. To be respected, the process must be just, and you must live a life worth listening to.”
Three years ago, following the New Year’s workshop, Chairman Jin introduced another book by Simon Sinek, 'Leaders Eat Last,' at a management strategy meeting, urging leaders to take the lead in driving change.
#ShinhanFinancialGroup #JinOkdong #purpose #leadership #organizationalethics #justice #internalcontrol #financialindustry #managementstrategy #corporateresponsibility
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- Lee Young-gu Faces Rising Pressure as Lotte’s Food Division Bets on Global Expansion Amid Domestic Slowdown
- Lee Young-gu, the Vice Chairman and Chief Executive Officer (CEO) of Lotte Group Food Division HQ, is expected to face increased pressure this year.
The food affiliates’ performance this year is projected to fall short of market expectations due to sluggish domestic demand. It is anticipated that Vice Chairman Lee will need to achieve groundbreaking results in global business to retain his position.
As of January 15, the outlook for key food affiliates of Lotte Group, such as Lotte Wellfood and Lotte Chilsung Beverage, is somewhat negative, according to the securities industry.
Jo Sang-hoon, a researcher at Shinhan Investment Corp., stated, “Due to sluggish growth in both domestic and international markets and prolonged cost burdens, Lotte Wellfood’s stock price has entered a correction phase since the second half of last year,” and lowered the company’s earnings forecast.
Jung Han-sol, a researcher at Daishin Securities, also reduced the target stock price for Lotte Chilsung Beverage, citing “a continued slowdown in domestic consumption and a decline in beverage sales growth due to intensified competition in the zero-calorie market,” and added, “The timing of domestic market recovery is delayed, leading to downward adjustments in performance estimates.”
Lotte Wellfood’s operating profit for this year is projected at KRW 214 billion (USD 154.3 million), which is 7.4% lower than the previous estimate of KRW 231 billion (USD 166.5 million). Lotte Chilsung Beverage’s operating profit forecast for this year is KRW 233 billion (USD 168 million), down 11.9% from earlier projections.
This signals a red warning for profitability.
Both companies are estimated to have delivered results below market expectations in the fourth quarter of last year. Lotte Wellfood is projected to have recorded KRW 977.2 billion (USD 704.5 million) in revenue and KRW 18.4 billion (USD 13.3 million) in operating profit on a consolidated basis in the fourth quarter of last year.
This represents a 0.2% decline in revenue and a 37% decrease in operating profit compared to the fourth quarter of 2023. Operating profit fell 27.8% short of consensus (market estimates).
Lotte Chilsung Beverage is also expected to report revenue of KRW 947.2 billion (USD 682.9 million) and an operating profit of KRW 24.6 billion (USD 17.7 million) for the same period, falling below market expectations.
The negative outlook has created challenges for Vice Chairman Lee, who managed to retain his position amid Lotte Group’s personnel reshuffle last year, thanks to the strong performance of food affiliates.
Vice Chairman Lee currently serves as the head of Lotte Group Food Division HQ and CEO of Lotte Wellfood. His term was initially set to end in March, but he was reappointed at the end of last year, extending his tenure.
The food affiliates under Lee’s leadership performed well overall. This strong performance contributed to the retention of most CEOs of Lotte Group’s food affiliates during the year-end reshuffle in both 2023 and 2024.
In recognition of his contributions, Lee was promoted to Vice Chairman at the end of 2023. It was the first time in five years that the Food Division HQ, including its predecessor, the Food BU, produced a Vice Chairman.
However, forecasts suggest that this year may be different. With sluggish domestic demand, achieving strong results may be challenging.
An industry insider stated, “This year’s performance of Lotte Group’s food affiliates will likely determine Vice Chairman Lee’s fate,” adding, “It will be difficult for him to retain his position without clear performance improvements overseas, given the current growth stagnation domestically.”
The insider also noted, “There must be tangible progress in overseas businesses, such as in India and Kazakhstan. For example, the new ice cream plant in Pune, India, is set to commence operations in the first quarter of this year, and an automated Pepero production line is being established in the unused space of the Haryana plant.”
While neither Lotte Wellfood nor Lotte Chilsung Beverage is expected to see negative growth, the challenging environment for securing profitability cannot be ignored.
Operating profit expectations have been lowered due to high exchange rates and a consumer recession, issues faced by all domestic food and beverage companies with a focus on the domestic market.
Ultimately, the answer lies in expanding overseas operations.
Jo Sang-hoon noted, “For Lotte Wellfood, the focus must ultimately be on overseas growth. While its valuation is attractive, the level of medium- to long-term valuation will depend on overseas expansion.”
The shift in focus toward global operations by both companies is viewed as a positive development.
Lotte Wellfood is pursuing a strategy to strengthen its market dominance, centering on its Indian subsidiary, which has the highest growth rate among its overseas businesses and has become the company’s largest revenue source.
Lotte Chilsung Beverage has set a goal to increase its overseas sales to KRW 1 trillion (USD 720.9 million) within four years.
Shin Dong-bin, Chairman of Lotte Group, has already instructed the food affiliates to enhance their overseas business capabilities.
In September last year, Chairman Shin held the “One Lotte Food Company Strategy Meeting” in Warsaw, Poland, where he stated, “Korean and Japanese Lotte must cooperate closely to become a company capable of sustainable growth in the global market,” and emphasized, “Strongly execute the development of diverse mega-brands that can achieve overseas sales exceeding KRW 1 trillion.”
The meeting was attended by Vice Chairman Lee, Lotte Wellfood CEO Lee Chang-yeop, Lotte Holdings CEO Tamatsuka Kenichi, and other executives from both Korean and Japanese Lotte food affiliates.
#LotteGroup #LeeYounggu #foodindustry #globalexpansion #LotteWellfood #LotteChilsungBeverage #overseasbusiness #Koreanfoodindustry #ShinDongbin #managementchallenges
