Samsung Electronics executives and industry insiders say that while Huawei is in trouble, Samsung Electronics is actively mobilizing human and material resources to vigorously develop its telecommunications network equipment business.
Samsung's two sources said that these efforts included the transfer of outstanding managers and many employees from the mobile phone sector to the telecommunications network equipment sector.
Potential customers have found that Samsung is trying to reshape itself as a top supplier of 5G wireless networks and narrow the huge gap with market leaders Huawei and Ericsson and Nokia.
A representative of Orange, a French wireless operator, said the company's chief technology officer visited Japan last year and was impressed by the speed at which Samsung and other manufacturers of alternative telecommunications equipment deployed 5G networks.
Orange operates in 27 markets, and Huawei is its largest equipment supplier. This year, the company will cooperate with Samsung for the first time to test 5G technology in France.
Samsung is eager for a new growth point
In January, Lee Nak-yeon, South Korea's prime minister, visited Samsung's telecommunications network equipment division, highlighting the growing importance of the business. At a closed meeting held during that visit, Jay Y. Lee, the successor of Samsung Group, asked the Korean government to help recruit senior engineers.
At present, the United States and some other Western countries refuse to use Huawei's devices in their 5G networks on security grounds.
Australia and New Zealand have joined the ranks of the United States, forbidding Huawei to participate in its 5G project. Many other countries, especially in Europe, are considering banning Huawei from participating in their 5G projects.
Huawei denies any security risks to its equipment. Its predicament has brought Samsung rare opportunities.
Telecom companies usually continue to work with their 4G suppliers when upgrading to 5G networks, because they can continue to use existing equipment to minimize costs. But now, many telecom companies are under political pressure to replace telecom equipment suppliers.
The source did not disclose the details of Samsung's staff adjustment. They refused to be identified because they were not authorized to speak on the matter.
When asked about Samsung's tremendous progress in telecommunications network equipment, Huawei said in a statement that it welcomed market competition.
Opportunities for India
In India, Samsung is currently negotiating with Reliance Jio, an Indian Telecom operator, to upgrade its network to 5G, making it a key supplier to the emerging Telecom operator.
In the absence of software engineers in South Korea, a major obstacle for Samsung will be attracting talent.
Samsung's telecommunications network business employs about 5,000 employees, according to a government official in the southern city of Gumi. Samsung operates its own manufacturing plant in the city.
Kim Young-woo, an analyst at SK Securities, expects Samsung to recruit 1,000 to 1,500 people for 5G network equipment this year. Samsung declined to comment on the recruitment plan.
But Samsung's bet is still risky, because the long-term nature of investment in telecommunications networks means that its performance will change very slowly.
Executives at Ericsson Sweden and Nokia Finland said they had not seen their sales grow when Huawei was in trouble. Nokia acquired the remaining assets of former powerful network equipment companies Alcatel-Lucent and Nortel.
Despite the huge opportunity to develop 5G and the plight of its biggest competitors, both companies are cutting costs.
In fact, some European network operators warned that the Huawei ban currently under consideration in France, Britain, Germany and other countries could delay the deployment of 5G for three years.
Others warn that Samsung may find it difficult to build a global sales and support system.
But Samsung has adopted a long-term development strategy. Last December, the company agreed to extend its partnership with the IOC to 2028 and extend its sponsorship to 5G technology.
Another person familiar with the matter said the company did not want to give its sponsorship seat to its Chinese competitors.