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Samsung chief Lee to be let out of jail as South Korea seeks White Knight to boost economy

Lee Jae-yong, Vice Chairman Samsung Electronics

Samsung Electronics Vice Chairman Lee Jae-yong, who has served 60% of his 30-month jail term for corruption, will be granted parole on Friday as South Korea seeks to spur investment in its largest corporation and rev up the economy.

South Korea is desperate to take on world leader Taiwan in the semiconductor business and also wants to cut its dependence on Japan for key electronic inputs. Samsung chief Lee is expected to spearhead the drive.

The country’s justice ministry said that Lee was included in the list of 810 prisoners to be released on the occasion of Liberation Day which falls on Sunday.

"In particular Samsung Electronics Vice Chairman Lee Jae-yong was included in the list as we considered the national economy and global economic circumstances due to the COVID-19 pandemic," the ministry said in a statement. "We also considered various factors including public sentiment and his attitude in prison," according to a report in Nikkei Asia.

"Only 0.3% of prisoners were given parole before they completed 80% of their jail term for the last 10 years," said Park in a press conference before the justice ministry's decision was announced.

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The parole comes as Samsung faces tough competition with Taiwan Semiconductor Manufacturing Co., Intel and other rivals in the global chip industry. The South Korean tech giant hopes to be the top maker of logic chips by 2030, adding to its current position atop the memory chip market.

It plans to spend 171 trillion won to accelerate research in cutting-edge semiconductor process technologies, and the construction of a new chip plant.

Many South Korean newspapers have also asked President Moon Jae-in to release Lee from jail so that Samsung can make bigger investments and step up acquisitions. Some even hope Lee can help the country secure more coronavirus vaccines by tapping his network of international contacts, Nikkei Asia said.

According to TrendForce, Taiwan has a 64% of the world market share of  nearly $90 billion as a chip-maker, with South Korea taking up 18%, China 6% and other countries 12%.

Taiwan's chipmaking giants dominate the industry. In the first quarter of this year, Taiwan Semiconductor Manufacturing Company held 55% of the global market, according to TrendForce, with its peer United Microelectronics Corporation taking 7%. Samsung was second after TSMC, with a 17% share.