Samsung Electronics Not Considering ADR Listing, Texas Plant to Break Ground by Year-End

Samsung Electronics has stated it is not currently exploring the possibility of listing its American Depositary Receipts (ADRs), a move that would allow its shares to trade on U.S. stock exchanges. The company's decision comes as it focuses on its global expansion, including the planned construction of a second semiconductor facility in Taylor, Texas. This new plant is slated to break ground by the end of 2024, with the goal of commencing mass production in 2030.

During a second-quarter earnings call, Samsung executives explained that the company's robust cash flow generation, driven by its diverse business portfolio, reduces the immediate need for additional funding through ADR issuance. While acknowledging that an ADR listing could broaden its investor base globally, Samsung also pointed to the increased administrative and disclosure burdens associated with such a move. The company also noted potential price discrepancies between ADRs and its domestic shares, depending on market liquidity and supply-demand dynamics, emphasizing the need to ensure any such listing would offer tangible benefits to all shareholders, including those in Korea.

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We are not currently considering an ADR listing.

Despite ruling out an immediate ADR listing, Samsung indicated that it remains open to considering it as one of several potential strategies for enhancing shareholder value in the medium to long term. The company's current focus appears to be on solidifying its manufacturing capabilities, particularly with the expansion in Texas, and maintaining its financial stability through strong operational performance rather than seeking external capital via U.S. markets at this juncture.

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We have secured stable cash generation capabilities based on our diverse business portfolio, so the need for ADR issuance for new funding is not high.