China emerges as key topic in Samsung shareholders meeting

Lim Chang-won Reporter Posted : 2018-03-23 13:29 Updated : 2018-03-23 13:29
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[Photo by Yoo Dae-gil =]

SEOUL -- China was a major topic at a meeting of Samsung Electronics shareholders Friday, with top executives responding to a flurry of questions over how to head off a daunting challenge by Chinese smartphones, microchips and displays.

It was Samsung's first shareholders' meeting since Vice Chairman Jay Y. Lee, the virtual head of South Korea's largest conglomerate, was released in February with a suspended jail sentence that ceased a year-long state of the leadership vacuum. Lee stayed away as part of his low-key publicity campaign. 

Kwon Oh-hyun, the chairman of Samsung's board of directors, took the helm and said in an opening speech: "This year the proliferation of protectionism and geopolitical risks will increase uncertainties in our business environment, and our company faces a new challenge because of a rapid paradigm shift in the IT industry."

Top executives warned that competition with Chinese companies would get fierce this year in smartphone and other fields, calling for pre-emptive measures to widen a gap with them by stepping up the development of new technologies and products.

"Competition is expected to intensify with Chinese companies which are latecomers, in addition to existing competitors," Samsung's consumer electronics division head Kim Hyun-suk said, adding there will be complex competition into artificial intelligence and internet on things (IoT). "To cope with intensifying global competition, we will have to analyze consumer needs in detail and secure competitiveness by preemptively preparing promising technologies," he said.

IT and mobile division chief Koh Dong-jin demanded a fundamental change in the business mindset to recover a smartphone market share in China. "China is a complex market that we should not treat like our domestic market," he said, calling for a composed and careful study of China's distribution and business practices. He said Samsung would try to enhance its growth momentum in the premium smartphone market, based on strict quality control.

Device solution division head Kim Ki-nam forecast brisk microchip sales this year, helped by strong demand in devices related to 5G and IoT. There is a technology gap with China, but Kim said Samsung would be complacent. "There is a high technology barrier in the semiconductor industry, compared to other industries. I don't think that the gap will be narrowed by large-scale investments in the short term."

"However, we will do our best to grow by keeping the technological gap in any situation by accelerating the development of technology without being confident," he said, warning of growing uncertainties in the display market due to the expansion of China's liquid-crystal display production.