Debate Rekindled Over Samsung Electronics’ U.S. Listing—A Solution to the “Korea Discount”?

U.S. listing emerges as a potential tool to improve valuation
“Business for the nation” philosophy anchors domestically focused management
Constraints include complex cross-shareholding and governance structure

Calls for Samsung Electronics to list on U.S. stock exchanges have resurfaced. Global investors argue that the company should seek a revaluation of its corporate worth through an American Depositary Receipt (ADR) listing, and the debate has intensified further amid reports that competitor SK hynix is also pursuing a U.S. listing. While such demands largely extend long-standing concerns, the discussion is expanding to include practical constraints such as Samsung’s complex governance structure, regulatory hurdles, and the potential for external shareholder intervention.

“Undervalued relative to investment scale”

David Samra, managing director at Artisan Partners, said in a recent Bloomberg interview that “Samsung Electronics should also pursue an ADR listing in the U.S. to achieve a proper revaluation.” Referencing SK hynix’s confidential filing with the U.S. Securities and Exchange Commission (SEC) on the 25th for an ADR listing, he added, “Samsung has also actively reviewed the cost-benefit analysis of an ADR listing for several years.” ADR listings, which involve issuing certificates in the U.S. backed by domestically listed shares, are widely regarded as an effective means of attracting global capital inflows and driving valuation reassessment.

Samra identified accessibility as the core issue behind the need for an ADR listing. “Retail investors in the United States have no practical way to access shares listed on the Korean market, meaning they cannot buy Samsung Electronics stock,” he said, emphasizing that “even an increase in liquidity alone could lead to a higher valuation and improved information flow across the investor base.” Artisan, which manages more than $5 billion in assets, has held Samsung Electronics shares for over a decade and owned a 0.7% stake as of the end of last year. Samsung is also the largest holding in the Artisan International Value Fund.

The effects of ADR listings have already been demonstrated within the semiconductor industry. Taiwan’s TSMC raised $520 million through an ADR issuance in 1997 and now commands a market capitalization of approximately $1.7 trillion. Following its U.S. listing, inflows from foreign investors and exchange-traded funds (ETFs) pushed ADR prices above those of its Taiwan-listed shares, with the price gap between the two markets exceeding 30% at times. This trend illustrates how valuations set in markets accessible to global capital can directly shape perceptions of corporate value.

For Samsung Electronics, the debate centers on its relatively low valuation compared with its scale of investment. In a disclosure on the 19th, the company said it plans to invest more than 73.3 billion dollars in capital expenditures and research and development this year, a 21.7% increase from the previous year’s 60.3 billion dollars. Despite this, its price-to-book ratio (PBR) remains below 3, a significant gap compared with competitor Micron’s roughly 5. While Samsung currently has global depositary receipts (GDRs) listed in London, limited connectivity to the U.S. market—the core of global capital flows—is cited as a key factor behind the persistent undervaluation debate.

National contribution through exports, jobs, and income

Samsung Electronics has long upheld the philosophy of “business for the nation,” honoring the legacy of its late founder Lee Byung-chul, who passed away in 1987. This concept, emphasizing corporate contribution to the nation and society, was established as the company’s primary founding principle, preceding talent-first management and rational pursuit. Lee once stated that “the duty and social responsibility of business leaders is to develop superior products through technological innovation ahead of competitors, expand exports, employment, and income, and generate surplus through efficient management to fund corporate expansion, ultimately serving the nation.” This statement directly reflects the direction of the philosophy.

This principle has significantly influenced key business decisions. Samsung’s expansion from small-scale trading, food, and clothing businesses into electronics in 1969 and later into semiconductors in 1983 cannot be fully explained by industrial conditions or profitability criteria at the time. When Samsung entered semiconductors, skepticism was widespread, with industry voices questioning how it could succeed in a field even Japan’s leading firms found challenging. However, under Lee’s leadership, Samsung developed 64K DRAM in 1983, followed by 256K DRAM in 1984 and 1Mb DRAM in 1986, laying the foundation for its semiconductor business.

The company’s operational model also reflects this philosophy. Since its founding in 1938, Samsung has actively expanded into industries tied to everyday life, including trade, sugar refining, and textiles, contributing to import substitution, foreign currency earnings, and job creation. This approach extended to the establishment of various public-interest foundations, such as the Samsung Cultural Foundation, Samsung Life Public Welfare Foundation, and Samsung Welfare Foundation, linking corporate activity with social contribution. It reflects Lee’s belief that “without a nation, there can be no enterprise,” placing the existence of the company on the same footing as that of the state.

This philosophy continues to shape the company’s current management stance. In 2019, then-Vice Chairman Lee Jae-yong attended a memorial marking the 32nd anniversary of Lee Byung-chul’s passing and stated, “Let us honor Chairman Lee’s philosophy of ‘business for the nation’ and contribute to our society and country.” Even as flexible strategies aligned with global markets gain emphasis, this philosophy is often cited as the reason Samsung maintains large-scale investments and key production bases in South Korea. It also explains why decisions regarding overseas listings cannot be understood solely through market logic.

Concerns over legal and institutional conflicts

A U.S. listing for Samsung Electronics has long been a recurring topic of market discussion. Interest in overseas listing scenarios for major Korean firms grew after Coupang’s listing on the New York Stock Exchange (NYSE) in 2021, which valued the company at approximately 36.7 billion dollars. At the time, Samsung’s share price remained range-bound, leading investors to cite it as a representative example of the “Korea discount.” Even earlier, in 2013, The Wall Street Journal noted that “while U.S. consumers can easily purchase Samsung products, investors face difficulty accessing Samsung Electronics shares,” raising the need for overseas listing.

Separately from external pressure, Samsung had previously pursued a Nasdaq listing in the early 2000s, forming a dedicated task force and taking practical steps such as adopting international accounting standards and establishing quarterly disclosure systems. However, in January 2001, the company officially shelved the plan, concluding that “the costs and efforts required for a Nasdaq listing outweigh the immediate benefits.” Nevertheless, foreign investors, including U.S.-based hedge fund Elliott Management, continued to push for governance restructuring and even proposed splitting Samsung Electronics and listing it on Nasdaq.

The challenge lies in the constraints that emerge when market demands move toward execution. Samsung maintains a complex governance structure involving cross-shareholding and inter-affiliate equity relationships, which are directly tied to Korea’s legal framework, including financial-industrial separation principles, fair trade regulations on equity investments, and holding company requirements. Samsung Biologics, for instance, experienced a delay of more than two months in its relisting schedule after undergoing intense scrutiny by the Korea Exchange following its plan for a corporate spin-off announced in May last year. If Samsung were to pursue a U.S. listing, it would need to simultaneously meet SEC disclosure standards and governance transparency requirements, increasing the likelihood of legal and institutional conflicts while maintaining its existing structure.

External shareholder intervention is also cited as a potential burden. In 2015, Elliott Management acquired 11,125,927 common shares of Samsung C&T and declared its intention to participate in management, publicly opposing the merger with Cheil Industries on the grounds that it undervalued Samsung C&T and harmed shareholder interests. In 2018, Elliott escalated the dispute by filing an investor-state dispute settlement (ISDS) claim worth approximately 670 million dollars related to the merger process. Such cases underscore the risk that expanding influence from global investors could become a significant obstacle to management decision-making.