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Apples and oranges

July 08,2017
Samsung Electronics delivered stunning and milestone-making earnings for the second quarter with operating profits at 14 trillion won ($12 billion) on sales of 60 trillion won. The company would have earned 1 trillion won every week during the last three months.

Samsung Electronics for the first time would dethrone Intel Corp. in terms of revenue as the world’s top semiconductor maker.

To ensure it maintains its leadership, the company began operation of the world’s biggest fabrication line in Pyeongtaek, Gyeonggi, completed at a cost of 15 trillion won and pledged to spend another 15 trillion won to upgrade facility and ramp up chip capacity. Given the sizzling demand for powerful chips, bigger memory, and increasing memory applications for computing on top of price strengthening, the company could expect strong figures in the following quarters, as well.

In contrast, another Korean household name, Hyundai Motor, has been facing one challenge after another. Sales in the first half halved from a year ago in the world’s largest car market due to China’s negative sentiment towards Korean brands because of the decision to install the Terminal High Altitude Area Defense (Thaad) U.S. missile shield in South Korea.

The global climate is turning more unfavorable for the carmaker. Japan and the European Union have come to agree on a free trade deal. Seven years after the deal goes into effect, the 10-percent levy on Japanese car imports to the eurozone will be lifted. Korean cars sold in the European Union will lose price appeal from Korea-EU FTA against their Japanese rivals. The employees are helping little. The union announced a breakdown in collective bargaining and went on strike.

The opposite picture of the two bellwether exporters underscores how brutal the global market can be.

Hyundai Motor employees should rethink collective action as production disruption amid worsening performance could deal a heavy blow.

JoongAng Ilbo, July 8, Page 26