[Start Economy] Samsung Electronics' personnel appointment 'reading the count'...Will it be revived by personnel reshuffling?

■ Host: Anchor Lee Jung-seop, Anchor Cho Ye-jin
■ Starring: Seok Byung-hoon, Professor of Economics at Ewha Womans University

* The text below may differ from the actual broadcast content, so please check the broadcast for more accurate information. Please specify [YTN News START] when quoting.

[Anchor]
We give you the latest economic news quickly and kindly. Start Economy, today with Seok Byung-hoon, a professor of economics at Ewha Womans University. Please come in. Let's talk about Samsung Electronics first. It is known that the presidents will conduct personnel appointments today
, but there is also a widespread prediction that there will be a major personnel reshuffle. First of all, what kind of innovation will continue in the semiconductor sector?

[Seok Byung Hoon]
That's right. There is a prediction that there will be a sharp wind around the semiconductor business. This is because the semiconductor business division had a combined operating profit of 12.22 trillion won by the third quarter of this year, and SK Hynix, a rival, achieved 15.4 trillion won during the same period, but was behind SK Hynix. Then, in the case of stock prices, there was once a prediction that it would reach 100,000 won because it was 100,000 won, but it is now in the 50,000 won range. That's why there's a widespread prediction that the semiconductor business sector will have a knife wind by holding it accountable because stock prices have also been nearly halved in performance.

[Anchor]
Attention is now being paid to the extent and size of personnel appointments this time. Samsung Electronics Chairman Lee Jae-yong mentioned this. The situation in Samsung is not easy right now. What do you think is the message you want to convey through this personal renewal?

[Seok Byung Hoon]
There is a prediction that it will be a new punishment. Therefore, it is believed that this is the first time since the foundation that Samsung Electronics is facing a crisis due to its business competitiveness. Now, SK Hynix has completely lost its leadership in the semiconductor business, especially in HBM, a high-bandwidth memory semiconductor. It seems that they will be held accountable for this. In the same case last year, five people were slightly appointed from the president's personnel to two promotions and three changes in work. This year, there will be a much larger movement than last year. Therefore, in the semiconductor sector, major presidents are expected to be moved and replaced. It is predicted that the number of executives' promotions will also be much smaller than in previous years.

[Anchor]
When it comes to companies that usually feed these semiconductor companies, Nvidia occupies a lot of the market. CEO Jensen Hwang said this. The news that Samsung Electronics is working quickly to approve the delivery of artificial intelligence AI memory chips has been reported. Then, isn't this a good thing for Samsung Electronics anyway?

[Seok Byung Hoon]
That's right. Nvidia CEO Jensen Huang said on the 23rd that he is considering receiving 5th generation high-bandwidth memory HBM from Samsung Electronics during an interview with Bloomberg TV at the Hong Kong University of Science and Technology's honorary doctorate ceremony. Currently, Nvidia is receiving most of the HBM supplies from SK Hynix. However, this is quite good news for Samsung Electronics. And Samsung Electronics also said on the 31st that it had completed an important step in the quality test, so it seems that significant progress has been made. However, in the case of next year's supplies, it seems that the contract has already been signed. Delivery is expected to begin in earnest from the next year even if it is delivered. However, the fact that this is imminent is good news that Samsung Electronics' performance is likely to improve in the future as it still seems to be the most important electricity to be delivered to Nvidia.
So reflecting this, yesterday's stock price of Samsung Electronics also led to a sharp increase in Samsung Electronics' stock price since the news came out.

[Anchor]
Since there is an owner risk, we will see how Samsung Electronics will deal with this crisis wisely. The next topic is that many bank stores are disappearing. The number of domestic bank branches has decreased a lot over the past five years. As a result, joint stores that use multiple banks in one store are emerging as an alternative, so what do you think about this?

[Seok Byung Hoon]
Bank stores and ATM machines have also decreased dramatically. Compared to the end of 2019, as of October this year, the number of bank stores was down 15.5% and for ATM machines, it was down 25.5%. In the case of banks, labor costs account for a considerable proportion. This is because the annual salary of the bankers is quite high. Recently, there have been criticisms that bank employees are giving too much or having a party, but even if they give a lot of honorary severance pay, restructuring will benefit the bank in terms of cost reduction. Reducing labor costs and reducing the number of stores through restructuring are measures to increase the bank's profits, so the number of stores is decreasing a lot. Instead, it is strengthening non-face-to-face sales and then mobile banking. However, the problem is that it becomes difficult for the elderly and the disabled who are vulnerable to digital banking to use financial services. So, it seems that the financial authorities are pushing for this alternative as an alternative to whether several banks should open joint stores that jointly operate one store. A joint store is also a solution. The post office has a sales network in every corner of the country for vulnerable people who have difficulty using these financial services. So there is also a way to use the post office as a place for joint stores. Next, there is another mobile store. It's used by some banks. What it is is to build a store in something like a big truck, a container, and take it to a certain area on a certain date and do business there. Using these mobile stores can also be an alternative, I believe.

[Anchor]
As technology advances and times change, banking-related tasks seem to be changing. Let's also look at the next topic. U.S. President-elect Trump has already mentioned a lot of tariff cards even before he's done his full-fledged work. What kind of things do you have?

[Seok Byung Hoon]
The tariff I mentioned this time was mentioned on my SNS account. I didn't even talk about it during the presidential election. What it is is to impose an additional 10% tariff on China in addition to the existing tariffs. The other thing is that we will impose 25% tariffs on Mexico and Canada. As soon as he took office next January, he said he would implement this immediately. So China, Mexico, and Canada are expressing considerable concern. However, in the case of Mexico and Canada, a large number of products are now traded without tariffs through the U.S., Mexico, and Canada agreements. However, renegotiation was scheduled in 2026. So I see it as a bargaining chip to gain an advantage in this renegotiation. And I also see China as a new bargaining chip for bilateral trade negotiations. And in the case of the Trump administration, what does this suggest, we quite prefer bilateral trade negotiations. And now, in the case of the United States, Mexico, and Canada, they maintain a fairly high trade surplus with the United States. That's why it's a strategy to induce quite favorable trade negotiations by threatening ultra-hard tariffs on these three major trade surplus countries. As a result, Korea, which achieved a record trade surplus with the U.S. last year, could also put considerable trade pressure on it. Therefore, in order to lower trade pressure, a strategy to lower the trade surplus with the U.S. is necessary. So as an alternative, isn't increasing imports from the United States in the short term going to lower the trade surplus? So importing energy or weapons can be a way to lower the trade surplus with the U.S. in the short term.

[Anchor]
As you said, there is a great concern now that U.S. priority is being applied in tariffs, usually in various areas of the economy. It was also reported as a breaking news early this morning. U.S. President-elect Donald Trump has said he can review subsidies. Since Samsung Electronics, SK Hynix, Micron, etc. have not yet received subsidies, I am worried that there will be a major disruption to our company's business.

[Seok Byung Hoon]
That's right. In the case of subsidies that the Biden administration had decided to pay to South Korea's Samsung Electronics and SK Hynix under the Semiconductor Support Act, there was an announcement that the Trump administration would push to implement them early before they were launched in January next year. I think he criticized this. As a result, concerns are growing that SK Hynix and Samsung Electronics may not receive the subsidies promised. However, in fact, Texas and Indiana are the regions where SK Hynix and Samsung Electronics have decided to invest and build semiconductor production bases. It's an area where Trump and Republican support is quite strong. So, if the subsidy is eliminated here, there will be fewer jobs in the area, so in fact, the opposition from the local residents is expected to be severe. Therefore, it is predicted that even if some of the subsidies can be reduced, the subsidies cannot be completely abolished. However, if we reduce the size of subsidies, in fact, our companies have no choice but to respond by reducing the amount of investment predicted in the future.

[Anchor]
There were many predictions of Trump's ever-changing economic policy last night, but he reviewed subsidies and took out tariff cards, but in this situation, when I looked at overseas stock markets, Europe fell, but all U.S. stock markets rose.

[Seok Byung-hoon]
Because, as I said earlier, there is a great prospect that Trump's tariff threats are actually only for negotiation. In fact, there was a strategy during the first Trump administration to use these tariff threats to take advantage of bilateral trade negotiations. The actual tariffs are expected to be considerably lower than this. In addition, the last FOMC minutes were released, where there were comments from the U.S. Fed suggesting further rate cuts. And yesterday, I also attended a joint conference between the National Institute of International Economic Research and the Korean Business Association in the United States. According to the National Institute of International Economics' forecast, the U.S. Fed will cut interest rates once this year, so given all these things, there are widespread predictions that stocks will naturally rise in the U.S. and there will be a boom in the U.S. economy in the short term. Therefore, foreign stock prices fall due to tariffs, and the U.S. is predicted to boom due to a cut in the benchmark interest rate in the short term, forcing U.S. stock prices to rise. However, imposing tariffs has resulted in this because automakers and liquor companies with factories in Mexico will inevitably be affected by a drop in stock prices.

[Anchor]
Also, right after the Trump tariff warning came out, the stock prices of U.S. automakers were in turmoil.

[Seok Byung Hoon]
Of course, that's inevitable. Because especially in the case of GM, Ford, and Stellantis, we have automobile factories in Mexico. That's why if you make cars from Mexico and bring them to the United States, as you've really announced, if you put a 25% tariff on them, they're affected by that tariff and they're going to increase the price of cars in the United States, so they're going to be less competitive in price. That will inevitably hurt your sales. In addition to that, auto parts makers such as Hyundai Mobis in Korea also have factories in Mexico. So, when Hyundai Mobis brings auto parts to the United States, of course, tariffs are added to it. And POSCO also has a factory in Mexico. But it delivers steel plates to automakers, which are also subject to 25% tariffs when they are brought to the United States from Mexico, so all of these have to be reflected in the price of cars manufactured in the United States. So this is a situation where we have no choice but to reduce car sales in the United States itself. So, reflecting this, U.S. auto shares are bound to fall. You can look at it like this. I think this is the reason why it can only be considered for negotiation.

[Anchor]
I see. I think there will be many issues in the future. I'll try to deal with it. So far, I was with Seok Byung-hoon, a professor of economics at Ewha Womans University. Thank you for talking today.