Samsung's Jay Y. Lee Acquitted, Shifting Focus To Business Challenges

Seoul High Court on Monday acquitted consumer electronics company Samsung Electronics Co SSNLF executive Chair Jay Y. Lee of fraud and stock-rigging charges. The ruling removes a legal hurdle for Lee as Samsung navigates business challenges.

Lee has faced graft allegations since 2017, Bloomberg reports.

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South Korean prosecutors first indicted Lee for allegedly providing horses and other payments to a former president’s confidante to win support for his succession. The case triggered the impeachment of then-President Park Geun-hye.

Monday’s ruling involved a 2015 merger between two of Samsung Group’s units. Prosecutors charged Lee with manipulating that deal.

Samsung has fallen behind SK Hynix in making the best memory chips for artificial intelligence, hampering its chip-making profit. At the same time, the Trump administration’s aggressive tariffs perpetrated uncertainty over Samsung’s mobile and consumer businesses.

Lee had faced a five-year prison sentence and a 500 million won ($341,000) fine.

Last week, Samsung reported fourth-quarter revenue growth of 12% to 75.8 trillion Korean won ($52.2 billion). Due to soft market conditions, operating profit declined by 30% Q/Q to 6.5 trillion Korean won.

Samsung flagged slow demand for conventional chips in personal computers and mobile phones, which is taking a toll on its memory business. Earnings were impacted by rising R&D costs and early investments in expanding advanced-chip processing capability.

Samsung’s memory and foundry division posted 30.1 trillion Korean won in revenue (versus 21.7 trillion Korean won Y/Y), backed by a higher blended DRAM average selling price (ASP) due to the higher sales of high-bandwidth memory (HBM) and high-density DDR5 for servers.

Reportedly, Advanced Micro Devices, Inc AMD is eying the smartphone market with advanced APUs leveraging Taiwan Semiconductor Manufacturing Co’s TSM 3nm process, targeting Samsung’s flagship models.

In 2024, Lee, during his two-week visit to the U.S., met with Mark Zuckerberg of Meta Platforms Inc META, Andy Jassy of Amazon.Com Inc AMZN, and Cristiano Amon of Qualcomm Inc QCOM. The discussions revolved around artificial intelligence, cloud service, and semiconductor collaborations.

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