Category: Korea-Business

Americans bringing dollars to Korea are getting a worse exchange rate:

Korea’s currency hit a 30-month high against the U.S. dollar Thursday as investors’ interest in safe-haven assets dwindled and expectations rose for vaccine development and further fiscal stimulus in the United States.  
   
Korea’s won closed at 1,097 won against the greenback Thursday, going below the 1,100-won level for the first time in two and a half years. The currency appreciated by 3.8 won, or 0.34 percent, against the U.S. dollar compared to the previous trading day.  
   
The exchange rate went to as low as 1,096.2 won Thursday. 

Joong Ang Ilbo

You can read more at the link.

This could just be a tactic to end the strike, but at some point I am sure GM has some red line they have identified to close their plant in Korea if this continues:

An executive of General Motors Co., the parent company of GM Korea Co., said the U.S. automaker could withdraw from South Korea if workers at the Korean unit continue to go on strike for wage hikes amid the COVID-19 pandemic, according to GM Korea Thursday.

GM Korea workers have been staging several rounds of partial strikes since Oct. 30, demanding an end to a wage freeze and a new vehicle production plan at its No. 2 Bupyeong plant in Incheon, just west of Seoul. 

The persistent industrial action has cost the company 17,000 vehicles in lost production, and the number is expected to reach 20,000 by the end of the week, Steve Kiefer, president of GM’s international operations, told Reuters.

Yonhap

You can read more at the link.

It looks like someone has finally decided to purchase Asiana Airlines, but it took a huge government investment to make it happen:

Korean Air Lines, the country’s largest carrier, will acquire cash-strapped rival Asiana Airlines with the help of the state-run Korea Development Bank (KDB).

The new airline will become the world’s No. 7 carrier by capacity to transport passengers and cargo, according to 2019 IATA numbersprovided by KDB.  

On Monday, the bank announced that it will indirectly provide financing to Korean Air Lines, which will use those funds and additional proceeds from a stock sale to buy a significant stake in Asiana Airlines.  

In the complex transaction, KDB will invest 500 billion won ($451.6 million) in Hanjin KAL and buy 300 billion won of the company’s exchangeable bonds. Hanjin KAL, which already owns 29.27 percent of Korean Air Lines, will buy 730 billion won of a 2.5-trillion-won share offering by the airline.  

The carrier will then use 1.8 trillion won of the newly raised capital to become the biggest shareholder of Asiana Airlines, by purchasing 1.5 trillion won of the airline’s new shares and 300 billion worth of perpetual bonds.

Joong Ang Ilbo

You can read more at the link.

This is going to be quite the tax bill for whoever takes over Samsung after the death of Lee Kun-hee:

As Samsung chief Lee Kun-hee passed away, his heirs, including his only son, Jae-yong, and his sisters will shoulder a record high amount of inheritance tax, industry sources said Sunday.

Lee Kun-hee, who led South Korea’s top family-controlled conglomerate Samsung Group, died at a hospital in Seoul on Sunday at age 78, leaving behind stock assets of some 18 trillion won (US$15.9 billion).

The senior Lee is survived by his wife, Hong Ra-hee, and only son, Jae-yong, and two daughters — Boo-jin and Seo-hyun.

Korea Biz Wire

You can read more at the link, but the article says the tax bill will be about 10 trillion won which is about $9 billion dollars.

Sad news for the family and friends of Samsung architect Lee Kun-hee who passed away yesterday:

 Lee Kun-hee, who had transformed Samsung Group into one of the world’s major tech giants from a small trading firm, died at a hospital in Seoul on Sunday at age 78, leaving a thorny succession challenge for his children.

The chairman of the flagship Samsung Electronics had been bedridden since May 2014 following a heart attack.

“Chairman Lee passed away on October 25 with his family, including Vice Chairman Jay Y. Lee, by his side. Chairman Lee was a true visionary who transformed Samsung into the world-leading innovator and industrial powerhouse from a local business,” Samsung said in a statement.

Yonhap

You can read more at the link, but Lee took over Samsung in 1987 at age 45 from his father and his turned it into one of the world’s largest and most respected name brand companies.

It will be interesting to see how the succession plays out with the Moon administration busy trying to throw his son in jail.

You better start checking under the couch for any change you can find to help pay for this new LG TV:

LG Electronics Inc. on Tuesday released the world’s first rollable TV in South Korea at a jaw-dropping price of 100 million won (US$87,000) as the tech giant aims to target high-end consumers amid the pandemic. 

The company said overseas launch schedules of LG Signature OLED R have not been fixed yet due to the COVID-19 situation in each country. 

LG said the product, which uses flexible OLED display that leverages self-lighting pixel technology, is designed to deliver a differentiated user experience to high-end consumers and strengthen its position in the premium TV market.

Yonhap

You can read more at the link, but what would someone use a rollable TV for?

According to the article ramen sales up this year because of the hit Korean movie “Parasite”. I think it probably has more to do with people eating out less or facing quarantine because of the coronavirus:

Exports of Korean instant ramyeon have sharply increased this year.

According to industry data and the Korea Agro-Fisheries and Food Trade Corporation, ramyeon exports in the first eight months jumped 36-point-seven percent year-on-year to 405 million dollars.

The figure has more than doubled over five years between 2014 and last year.

By country, shipments to China, the biggest importer, increased 45 percent from January to August to top 105 million dollars.

During the same period, exports to the U.S. also rose 56 percent and to Japan by 48 percent.

Ramyeon exports to Southeast Asia are also on a rapid rise thanks to the Korean Wave phenomenon known as Hallyu.

KBS World Radio

You can read more at the link.

Another source of technology to China’s Huawei is about to be closed:

After U.S. Secretary of State Mike Pompeo’s request for countries to join Washington’s move to restrict the direct or indirect use of U.S. technology by Huawei, its top Korean suppliers are rethinking their partnerships with the Chinese tech company.

Pompeo said in a press statement Aug. 17 that Washington urges its allies and partners to join its anti-Huawei campaign. 

“The Department of State strongly supports the Commerce Department’s expansion of the Foreign Direct Product Rule, which will prevent Huawei from circumventing U.S. law through alternative chip production and provision of off-the-shelf (OTS) chips produced with tools acquired from the United States,” Pompeo said in the statement.

The Commerce Department also added 38 Huawei affiliates to its Entity List, which identifies foreign parties prohibited from receiving certain sensitive technologies, while allowing Huawei’s Temporary General License (TGL) to expire. 

The United States has provided ample time for affected companies and people ― primarily Huawei customers ― to identify and shift to other sources for equipment, software and technology and wind down their operations, the statement said, adding, that time was up.

A few weeks after the statement, industry officials said Huawei’s top Korean suppliers ― Samsung Electronics, SK hynix, Samsung Display and LG Display ― were rethinking their partnerships with the Chinese firm and suspending sales of memory chips and high-end smartphone panels for use in its consumer products.

“Amid the tightening rules on Huawei by the Trump administration, there’s no option but to temporarily suspend the sale of components to Huawei,” a high-ranking industry executive told The Korea Times.

Huawei buys “billions of dollars” of memory chips and display panels annually from Samsung Electronics, SK hynix, Samsung Display and LG Display. The suspension of trade will be effective from Sept. 15, the day a new set of rules limits dealing with the Chinese company.

Korea Times

You can read more at the link.

Congratulations to Samsung on winning this huge contract:

Samsung Electronics signed a 7.9 trillion won ($6.6 billion) deal to supply network equipment to U.S. telecommunications company Verizon, the Korean IT firm disclosed Monday in a public filing.

Under the contract, Samsung Electronics America will provide equipment, including for 5G connections, to Verizon for five years through December 2025. By volume, it’s the biggest single supply deal for network equipment ever secured by a Korean company.    

Samsung had worked with domestic mobile carriers last year to make Korea the first country to commercialize 5G connections. After 5G debuted April 2019, the company has signed network equipment supply deals with major telecommunications operators, including Canada’s Videotron, the U.S.’s Cellular and New Zealand’s Spark.   

Joong Ang Ilbo

You can read more at the link, but hopefully Samsung continues to beat out contracts over Huawei, their main Chinese competitor. ROK Heads may remember that Huawei has been accused of spying on behalf of the Chinese communist party.