After 54.9 billion in inheritance tax, Lee Jae-yong wins big alone; Samsung no longer has a "eldest princess"

On April 7, according to Red Star News, the Samsung family will pay off the final installment of the inheritance tax of 120 trillion won (about RMB 54.9 billion). This tax payment not only keeps the current head of Samsung, Lee Jae-yong, firmly at the very center of power, but also buys the wives and other female family members of the Lee family some partial say within the Samsung empire.

In 2020, Lee Kun-hee, the second chairman of Samsung Group, left about 260 trillion won (about RMB 119 billion) in inheritance, which included a large amount of Samsung stock, real estate, and private art collections. The inheritance tax totaled about 120 trillion won (about RMB 54.9 billion).

To raise the tax payment, family members took different approaches. Lee Kun-hee’s widow, Hong Ra-hee, and his daughters (Lee Boo-jin, Lee Seo-hyun) chose to sell a large portion of shares in core subsidiaries, so they could obtain the inheritance as quickly as possible.

By contrast, Lee Jae-yong, the current chairman of Samsung and the only son of Lee Kun-hee, would rather take out loans from banks, pay high interest, and not sell the Samsung shares he holds. After all, in the chaebol culture of South Korea, control is always given priority over cash.

According to statistics, Lee Jae-yong’s shareholding ratio within the “Samsung empire” has been gradually increasing. He currently holds 1.67% of Samsung Electronics shares, higher than the 0.7% before inheriting his father’s shares. In addition, his stake in Samsung C&T rose from 17.48% to 22.01%, and his stake in Samsung Life Insurance Company also increased from 0.06% to 10.44%.

Thanks to the AI boom, Samsung’s share price—held by the storage core industry—has risen overall over the past two years. In 2025 it rose 123.8%, and from 2026 to date it has increased another 62%. The market value growth of the shares in Lee Jae-yong’s hands far exceeds the loan interest and even the tax itself.

This is not only a clever financial maneuver, but also a ruthless internal power reshuffle within the family. How did Lee Jae-yong “invite” his sisters out of the core power circle—and what new hope will he bring to Samsung when he is left with them? (000876)

Samsung princesses, sell shares and exit

As is well known, the relationship between chaebols and politics in South Korea has never been about confrontation, but about transactions. In 2024, data showed that the four major chaebols—Samsung, Hyundai, SK, and LG—accounted for 40.8% of South Korea’s GDP sales,

To regulate the distribution of wealth and curb chaebol monopolies, the South Korean government established high inheritance taxes, with the purpose of cutting off the “intergenerational replication” of wealth and preventing chaebols from permanently controlling the nation’s economic lifeline through inheritance.

The Samsung family understands the rules as well, so it chose the hardest path—paying the full amount of tax, without setting up offshore trusts, without transferring assets, and without pressuring the government to amend the tax law. All operations were publicly disclosed through the electronic system of the Financial Supervisory Service. When filing inheritance tax in 2021, they chose a method to pay the tax off in six installments over five years.

Among them, the widow of Lee Kun-hee, Hong Ra-hee, had the highest inheritance tax obligation at 3.1 trillion won; the children of Lee Kun-hee—Lee Jae-yong, Lee Boo-jin, and Lee Seo-hyun—were respectively obligated to pay 2.9 trillion, 2.6 trillion, and 2.4 trillion won.

Looking back at Samsung under Lee Kun-hee’s management, his children were always his trusted right-hand partners. At that time, his eldest son Lee Jae-yong ran the core electronics and finance businesses and inherited the group’s holding-company structure; his eldest daughter Lee Boo-jin was responsible for hotels (Shilla Hotel) and the chemicals business; his second daughter Lee Seo-hyun handled apparel, advertising (Cheil Industries), and the amusement park business, achieving the “three-way division of power.”

There are rumors in society that Lee Kun-hee held high hopes for his two daughters.

“In order to advertise for my daughters, and to promote them.” In January 2010, when Samsung Electronics chairman Lee Kun-hee held the hands of his two daughters and attended the World of Home Appliances exhibition in Las Vegas, USA, he said this—showing how much he cared for his two daughters.

However, later on, Lee Jae-yong gained the upper hand in the game. In 2015, Samsung Group’s core holding company, Samsung C&T, merged with Cheil Industries, which was widely seen as a key step for Lee Jae-yong to consolidate his power.

After the merger, Lee Jae-yong became the largest shareholder of Samsung C&T, with a stake of about 16.5%. The two sisters, Lee Boo-jin and Lee Seo-hyun, each received about 5.5% of Samsung C&T shares.

With an absolute shareholding advantage, Lee Jae-yong quickly established actual control over the group. Although the two sisters still served as CEOs in their respective fields (hotels, apparel), they no longer had the ability to influence their brother’s decisions.

And during the inheritance tax payment stage, the two sisters had even less interest in staying in the fight. They chose to quickly offload their shares and exit.

After the two stones landed

In South Korea, the relationship between chaebols and politics has never been one of opposition, but of deals. The 120 trillion won inheritance tax was also the entry ticket Samsung bought for the AI storage era.

Over the past five years, to deal with Lee Jae-yong’s potential legal risks and to raise funds for the tax, Samsung has been extremely conservative in major mergers and acquisitions. Its core business progress has also been relatively quiet. A year earlier, it was still mired in HBM delivery difficulties, forcing executives to apologize.

By contrast, Samsung’s “old friend,” SK hynix, carried out a frantic expansion of capacity. Amid the wave of explosive AI computing power demand, HBM transformed from a niche product into the hottest semiconductor track. SK hynix accordingly gained entry into NVIDIA’s core supply chain and reaped huge profits. In 2025, SK hynix’s operating profit reached 47.2 trillion won, outperforming Samsung’s semiconductor division’s 24.9 trillion won.

And as criminal lawsuits related to “improper mergers and acquisitions cases” and “accounting fraud cases” were ruled not guilty, and the inheritance tax installments continued for five years until fully paid, the two stones hanging over Lee Jae-yong’s head finally landed. Samsung also established a clear storage roadmap.

The good news is that Samsung has been quietly accumulating resources. As of the end of 2025, Samsung had 125 trillion won in cash on its books. Some institutions predict that Lee Jae-yong may replicate his father Lee Kun-hee’s strategy from back then and kick off a merger-and-acquisition frenzy in the AI, semiconductor, and biotech/pharmaceutical sectors.

Clear signs are already emerging. Samsung announced after its 2026 shareholders’ meeting that its annual investments in AI semiconductor R&D and manufacturing would exceed 110 trillion won. This figure is up 21.7% compared with 2025. It is the first time in Samsung’s history that annual investment has broken through 100 trillion won. The bulk of the spending will be directed toward HBM and advanced packaging.

Under the storage super-cycle, Samsung’s semiconductor business is becoming the group’s core business. On the morning of April 7, Samsung released its earnings guidance for the first quarter of 2026.

Among them, the DS division (semiconductors) is expected to record an operating profit of about 50 trillion won in Q1, accounting for more than 87% of total profit, compared with 16.4 trillion won in the previous quarter.

The driving force comes from a simultaneous rise in both volume and price for storage chips. On one hand, the HBM business has started to ramp up, with revenue increasing by more than 300% year over year. In addition, HBM4 has begun supplying to customers, narrowing the gap with SK hynix overall; Samsung also completed Q2 price negotiations with customers, with DRAM prices rising again by about 30%.

This also pushed Samsung to deliver a sunny performance for Q1 2026: operating profit is expected to be about 57.2 trillion won, up more than 8 times year over year. This figure is already close to the total operating profit Samsung recorded for all of 2025. In the same period last year, it was only 6.69 trillion won.

Samsung’s basic fundamentals for its Q1 2026 financial report

Despite the strong results, concerns in the market about the outlook ahead have also started to appear.

As NH Investment & Securities senior analyst Ryu Young-ho analyzed, concerns that the memory price uptrend has peaked are increasingly intensifying. At this point, it appears we have moved past the early stage of the upcycle and into the later stage.

If the industry encounters a downturn, Lee Jae-yong’s bets and decisions will affect the operation of Samsung’s business empire. After all, judging from the business data in Q1, although the semiconductor division is capturing the benefits, the procurement costs for parts in the finished goods segment (phones, TVs) have risen sharply, severely compressing profits. Cold and hot extremes—this is the new課題 Samsung needs to think through.

(Editor: Kang Jialin)

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