Samsung Electronics Chairman Lee Jae-yong and SK Hynix CEO Kwak Noh-jung attended the China Development Forum (CDF) in Beijing on March 22, discussing cooperation with senior Chinese officials and global business leaders. Industry observers are watching whether the two companies, poised to post record first-quarter earnings, will expand their China investments and market presence.
According to Samsung, SK Hynix, and foreign media reports, Lee and Kwak participated in the CDF held at the Diaoyutai State Guesthouse in Beijing. The annual forum, hosted by the Development Research Center under China's State Council, brings together top Chinese economic officials and global business leaders. Chinese attendees this year include Premier Li Qiang, Beijing Party Secretary Yin Li, and State Council Secretary-General Wu Zhenglong. About 90 global executives are participating, including Lee, Kwak, Apple CEO Tim Cook, Qualcomm CEO Cristiano Amon, and Broadcom CEO Hock Tan.
Lee and Kwak, attending the CDF for the second consecutive year, will engage in two days of discussions with Chinese government officials and global business leaders under the theme "China in the 15th Five-Year Plan: Co-creating High-Quality Development and New Opportunities."
Industry attention is particularly focused on whether Samsung and SK Hynix, which are breaking earnings records amid the semiconductor super cycle, will coordinate large-scale additional investments in their Chinese operations.
Both companies have faced difficulties expanding investments due to growing uncertainty in the Chinese market following U.S. semiconductor export restrictions on China last year. If Lee or Kwak commits to expanding China investments at this forum, Beijing could achieve its dual goals of economic stimulus and semiconductor industry advancement.
Investment conditions are also improving. Late last year, the U.S. Commerce Department eased restrictions by allowing Korean semiconductor companies to export equipment to their Chinese factories through annual approval quotas. Samsung Electronics and SK Hynix are expected to post record operating profits exceeding 36 trillion won and 30 trillion won respectively in the first quarter, making fund deployment feasible if investment conditions allow. There is also speculation that both companies may increase investments at their Xi'an and Dalian plants respectively to boost NAND flash production amid growing global demand.
Some observers suggest Chinese President Xi Jinping may hold direct meetings with global CEOs and request expanded local investments from Lee and Kwak.
