Samsung forges 'shared destiny' partnership ecosystem with suppliers

Samsung is building a mutual-growth ecosystem with its suppliers to spread and entrench a culture of cooperation between large and small companies. The group said it would use the new partnership agreement to elevate its supplier relationships to the level of a "community of shared destiny," deepening collaboration across financing, technology and human resources while laying the groundwork for a healthy supply chain ecosystem.

Samsung held the mutual-growth partnership signing ceremony Monday at Samsung Electronics' Suwon campus, bringing together tier-1 through tier-3 suppliers.

Eleven Samsung affiliates took part — Samsung Electronics, Samsung Display, Samsung Electro-Mechanics, Samsung SDI, Samsung SDS, Samsung C&T, Samsung Heavy Industries, Samsung E&A, Cheil Worldwide, Shilla Hotel and Semes — alongside their suppliers. The agreement is expected to benefit about 6,700 companies across Samsung's supply chain.

About 150 people attended the ceremony, including Fair Trade Commission Chairman Ju Byung-gi, the heads of the 11 participating Samsung affiliates and representatives of key suppliers.

In a congratulatory address, Ju said Samsung's decision to significantly improve payment terms for tier-1 suppliers and offer them clear incentives "will be a critical driver in ensuring that the fruits of Samsung's mutual-growth cooperation reach tier-2 and tier-3 suppliers."

He added that the inclusion of cooperation measures for tier-2 and tier-3 small and medium-sized suppliers in Samsung's recently announced 5 trillion won ($3.24 billion) social-contribution pledge "is a model example of responsible leadership by a large conglomerate." Samsung Electronics announced the 5 trillion won pledge in May, which included plans to support tier-2 and tier-3 suppliers and establish and operate an industrial accident fund.

Samsung Electronics President Roh Tae-moon said the signing would serve as a springboard to "build a higher level of cooperative relationship as a community of shared destiny that grows together with our suppliers." He pledged to continue providing diverse support — including financing, technology and education — in the name of mutual growth.

Hyeopseong Association Chairman Kim Young-jae said he hoped Monday's gathering would "serve as an opportunity for the government, large companies and small businesses to join hands and further solidify the spirit of shared growth," adding that suppliers would redouble their efforts on technological innovation and quality competitiveness.

The ceremony also featured a showcase of best practices, including Samsung Electronics' smart factory support program for small and medium-sized enterprises, which launched in 2015. Over the past 11 years, a dedicated team of 160 manufacturing specialists — each with more than 30 years of experience — has supported 3,600 companies.

Lee Gwang-ryeol, head of Samsung Electronics' Smart Factory Center, said teams of at least three manufacturing experts spend roughly two months on-site at each small business, driving hands-on improvements. "Through the smart factory support, productivity has improved by an average of 44 percent and defect rates have fallen by 53 percent, generating increases in sales, employment and R&D investment," he said.

Samsung Electronics said it hopes the agreement will serve as a turning point for strengthening trust-based co-growth activities and spreading a culture of mutual cooperation throughout its supply chain.

Even before the agreement, Samsung had been providing tailored support to suppliers centered on financing, technology and personnel. On the financing front, the group said it would continue to expand financial support for suppliers' facility investment, technology development and ESG transition through its existing 3.5 trillion won mutual-growth and ESG funds.

The 11 participating Samsung affiliates plan to expand communication channels with their suppliers and regularly assess the effectiveness of support programs.

They also plan to explore a range of cooperation measures to strengthen suppliers' global competitiveness, including support for overseas expansion and linkages with global supply chains.

Meanwhile, Samsung Electronics' sustained mutual-growth efforts have earned recognition: in October last year, it received the top rating for the 14th consecutive year in the Co-prosperity Index assessment by the Korea Commission for Corporate Partnership — the first domestic company to achieve that distinction.