Samsung is strengthening its supply chain competitiveness by signing a partnership agreement with first to third-tier suppliers to foster a cooperative ecosystem. The initiative aims to expand financial, technological, and workforce support to promote mutual growth among suppliers.
On June 29, Samsung held a signing ceremony at its Suwon facility, attended by representatives from 11 affiliates, including Samsung Electronics, Samsung Display, Samsung Electro-Mechanics, Samsung SDI, Samsung SDS, Samsung C&T, Samsung Heavy Industries, Samsung E&A, Cheil Worldwide, Hotel Shilla, and Semes.
The agreement is expected to encompass around 6,700 suppliers within Samsung's supply chain. Approximately 150 attendees included Joh Byung-ki, Chairman of the Fair Trade Commission, and No Tae-moon, President of Samsung Electronics, along with representatives from the 11 affiliates and key suppliers.
Through this agreement, Samsung plans to enhance practical support in finance, technology, and workforce development, moving beyond transactional relationships with suppliers. The company intends to broaden communication channels with suppliers and continuously assess the effectiveness of its support programs.
Industry experts note that amid global supply chain restructuring and heightened ESG regulations, it is crucial for large corporations to elevate quality, safety, and environmental standards not only for first-tier suppliers but also for second and third-tier suppliers to maintain export competitiveness.
Samsung will also expand its financial support. The company currently operates a cooperative fund and an ESG fund totaling 35 trillion won. It plans to continue providing financial assistance for facility investments, technology development, and ESG transitions for its suppliers.
Since 2005, Samsung has been the first domestic company to pay cash for transactions with small and medium-sized suppliers. In 2010, it established the 'Cooperation Fund' to offer low-interest loans for operational funds, facility investments, and research and development. Since November of last year, Samsung Display has collaborated to create a 1 trillion won 'ESG Fund' that provides interest-free loans for environmental and safety improvements and energy-saving investments.
Samsung is also providing technological support. In partnership with the Ministry of SMEs and Startups, it is assisting small businesses without trading relationships with suppliers in building smart factories. Since 2009, it has held 'Excellent Technology Briefings' to help suppliers acquire new technologies. Since 2015, it has opened its patents for free, facilitating approximately 2,500 patent transfers by last year.
In workforce development, Samsung supports supplier hiring and training through initiatives like the 'Samsung Supplier Recruitment Fair' and the 'Cooperative Academy.' It offers management, technology, and leadership training for supplier employees, along with tailored consulting in AI, ESG, and automation.
Samsung's recent 5 trillion won social contribution plan includes support for second and third-tier suppliers and the establishment and operation of an industrial accident fund, which is also part of this cooperation agreement. During the ongoing 'Samsung Electronics Thank You Festival,' the company is providing 400 billion won worth of gift certificates instead of product discounts to encourage spending at local small businesses.
Joh Byung-ki, Chairman of the Fair Trade Commission, stated, "This cooperation agreement will serve as a catalyst for Samsung's efforts to ensure that support flows smoothly to small suppliers, creating a virtuous cycle." He added that the Fair Trade Commission will also support the fruitful outcomes of Samsung and its suppliers' efforts.
No Tae-moon, President of Samsung Electronics, remarked, "The existence of today's Samsung is due to the blood, sweat, passion, and efforts of many suppliers. We will strive to build a higher level of cooperative relationship as a community of shared destiny, ensuring that the warmth of cooperation reaches second and third-tier suppliers as well."
* This article has been translated by AI.
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