Behind Samsung's Lee Jae-yong's visit to China: Reconstruction of the electronic components industry and supply chain game

1. Visit to China: Strategic layout from Xiaomi to BYD

From March 22 to 24, 2025, Samsung Electronics Chairman Lee Jae-yong embarked on his first overseas trip after his acquittal, with the first stop being China. This visit to China covers three core nodes: Xiaomi Automobile Factory in Beijing, China Development Forum at Diaoyutai State Guesthouse, and BYD Headquarters in Shenzhen. The joint action with Qualcomm President Amon and the closed-door talks with Lei Jun and Wang Chuanfu revealed Samsung's deep strategic intentions in the field of electronic components.

1. Xiaomi: From "supply cut crisis" to technical collaboration

Lee Jae-yong's visit to Xiaomi SU7 Ultra production line is seen by the outside world as Samsung's deep penetration into China's new energy vehicle industry chain. Ten years ago, Xiaomi clashed with Samsung over screen supply issues, and Lei Jun's past experience of resolving the crisis through "five bottles of red wine diplomacy" has now evolved into an equal dialogue at the technical level. Currently, Samsung's share of Xiaomi's mobile phone screen supply has dropped from 60% to 40%, but the two sides are exploring cooperation upgrades in automotive-grade chips and in-vehicle display technology.

2. BYD: Technology supplement in the new energy field

The scene of Lee Jae-yong landing in BYD's Hexagon Building by helicopter highlights Samsung's urgent need for core electric vehicle technology. BYD's technological advantages in battery management systems (BMS) and digital cockpits complement Samsung's accumulation in memory chips and automotive semiconductors. The cooperation between the two sides may focus on the localization of research and development of in-vehicle electronic accessories to cope with the competitive pressure from companies such as Tesla and Nvidia.

2. Samsung Crisis: "Internal and External Troubles" in the Electronic Components Industry

1. Market share continues to decline

Memory chips: Samsung's global DRAM market share will drop by 0.7 percentage points in 2024, and the operating profit of the storage department will drop by 24.9% year-on-year. The technological breakthroughs of China's Yangtze Memory and Changxin Memory are shaking its pricing power.

OLED panel: market share plummeted from 63.2% to 43.2%, BOE and TCL Huaxing accounted for 56.8% of global orders, and the technical barriers of Samsung's high-end screens gradually disappeared.

Smartphone: global market share fell from 21.4% to 18.3%, and China's market share was only 0.6%. Supply chain cost pressure forced strategic adjustments.

2. Technology iteration encountered bottlenecks

HBM chip: due to failure to pass NVIDIA certification, delivery lagged SK Hynix by half a year, missing the market opportunity of AI computing power explosion period.

Foundry business: 2nm process mass production lags behind TSMC, and Intel's order loss exacerbates overcapacity.

Talent crisis: engineer turnover rate increased by 3.2%, and the wave of strikes in Indian factories forced the HBM production line to stop working.

3. China's Power: The Rise of the Electronic Components Industry

1. Domestic Substitution Accelerates Breakthroughs

In the field of panels: BOE and Huaxing Optoelectronics have achieved mass production in flexible screens, Mini LED and other technologies, breaking Samsung's monopoly.

Memory chips: Yangtze Memory's 128-layer 3D NAND and Changxin Memory's DDR4 technology have been mass-produced, and the domestic self-sufficiency rate has increased to 35%.

Automotive-grade chips: Horizon Journey 6, Black Sesame A2000 and other products have achieved automotive-grade certification, and the supporting industrial chain has been gradually improved.

2. Industrial Ecosystem Reconstruction

Technology Localization: Huawei Ascend and Cambrian MLU series accelerate the landing of AI chips, driving the demand for supporting components such as storage and sensors.

Market Binding: Xiaomi SU7 Ultra is equipped with domestic silicon carbide modules, and BYD and Star Semiconductor jointly build automotive-grade IGBT production lines to form a "technology + market" closed loop.

Policy coordination: The 2025 "New Energy Vehicle Industry Development Plan" clearly defines the chip localization rate target and promotes collaborative innovation in the industrial chain.

IV. New paradigm of cooperation: from supply chain game to ecological integration

1. Technology complementary model

Samsung HBM4E chip is combined with the computing power requirements of China's AI big model, and BYD BMS system is deeply adapted to Samsung's automotive semiconductors, forming "hardware + software" collaborative innovation.

2. Production capacity optimization path

By supplying high-end components to Xiaomi and BYD, Samsung can quickly obtain feedback on technology iteration and dilute R&D costs with the help of large-scale production of Chinese companies.

3. Geostrategic balance

Against the background of the US chip ban, Samsung rebuilt the trust of the Chinese market through technical cooperation, echoing Apple's statement that "without Chinese partners, there would be no Apple today", showing the "fence-sitting strategy" of technology giants in the Sino-US game.

V. Future Outlook: New Ecology of the Electronic Components Industry

As the traditional model of Chinese market demand and Western technological advantages collapses, a new ecology of "technology localization + market binding" is taking shape. The signal released by Lee Jae-yong's visit to China shows that Samsung is considering China as a key battlefield in the AI ​​era. Through deep ties with Xiaomi, BYD and other companies, Samsung may be able to bypass direct competition with SK Hynix and open up a "curve to save the country" path. The Chinese electronic components industry needs to continue to make breakthroughs in technological innovation, industrial chain collaboration, and international standard setting to build an industrial ecosystem with global competitiveness.