SINGAPORE (Apr 9): Three years ago, veteran US activist hedge fund manager Paul Singer of Elliott Management waged a proxy battle to shake up South Korean tech giant Samsung Electronics Co. Though Singer failed in his battle to stop the merger between two affiliated firms within the Samsung group, he won the war. Lee Jae-young, Samsung’s vice-chairman and heir apparent whose father Lee Kun-hee has been in a coma for nearly five years, was jailed for bribing an associate of then President Park Geun-hye to facilitate that deal, triggering her impeachment and removal a year ago.
Last month, Samsung, the region’s third-largest listed firm behind Tencent Holdings and Alibaba Group Holding, introduced its new iPhone challenger, the Galaxy S9. Although the S9 has not been a roaring success in part because the US$438 billion ($575.2 billion) global smartphone market continues to shrink, it avoided the flameout of its predecessor Galaxy Note 7 phablet, which was recalled after its defective batteries exploded in users’ hands.
A year after the debacle, Samsung is rebounding, benefiting from synchronised global growth and robust export growth amid demand for its high-end chips, screens and other components. In January, it reported net profits of US$38.9 billion for last year. It recently overtook Intel as the world’s largest semi conductor company. “Samsung is one of the most underestimated and misunderstood companies in the world,” says Mark Newman, semiconductor analyst at Sanford C Bernstein in Hong Kong, who once worked for Samsung.