Intensified Competition, Trump Risk, and Oversupply... Samsung Biologics CEO John Rim Faces Mounting Challenges Amid Uncertainty

[Korea Financial Times, Kim Nayoung] Even as Samsung Biologics (hereinafter referred to as Samsung Bio) continues its strong growth, aiming for annual revenue of KRW 5 trillion this year, uncertainties persist.

Former U.S. President Donald Trump has signaled a tariff war, and the competition for dominance in the CDMO sector is intensifying. With rising domestic and international uncertainties, attention is focused on the leadership of Samsung Bio CEO John Rim.

The second term of the Trump administration is one of the biggest variables for the biotech industry. Initially, domestic biotech firms anticipated benefits from the Trump administration’s ‘Biological Security Act,’ but they now face the unexpected hurdle of heavy tariffs. The Biological Security Act, designed to curb Chinese firms, was expected to provide a competitive advantage to South Korean biotech companies.
However, recent remarks by Trump about imposing at least a 25% tariff on pharmaceuticals have altered the outlook. In response, biotech firms with significant exports to the U.S., such as Celltrion and SK Biopharmaceuticals, have quickly announced countermeasures.

Unlike its peers, Samsung Bio has opted to monitor the situation until detailed policies are unveiled. It appears that the company finds it burdensome to make major decisions, such as expanding local production facilities, before the specifics of the tariff policies are confirmed.

Samsung Bio’s revenue from the U.S. market amounted to KRW 1.1741 trillion last year, accounting for 25.8% of its total revenue—second only to Europe (65.1%).

Concerns over potential oversupply remain another key issue. While the CDMO market is growing at an annual rate of 8–10%, making a supply glut unlikely in the near future, demand for biopharmaceuticals is surging, leading some analysts to predict a worsening capacity shortage instead. However, as the market expands, so does competition.

In South Korea alone, large conglomerates and traditional pharmaceutical companies are rushing into the CDMO business. Lotte Group has launched Lotte Biologics, while SK Group is expanding into the market through SK Pharmteco and SK Bioscience. Traditional pharmaceutical giants, including Yuhan Corporation, GC Biopharma, Chong Kun Dang, Hanmi Pharmaceutical, and Daewoong Pharmaceutical—collectively regarded as the ‘Top 5’—have also entered the CDMO sector.

More recently, Celltrion has joined the fray. In December last year, the company established a specialized CDMO subsidiary, Celltrion Biosolutions, and plans to begin construction of production facilities in the first half of this year.

Given these developments, some experts argue that a long-term approach to managing potential oversupply risks is necessary. A biotech industry insider stated, “While the CDMO market looks promising for the foreseeable future, risks still exist. In particular, it remains uncertain how long the excess demand for contract manufacturing (CMO) will persist.”

Regarding these concerns, CEO John Rim remarked, “There are voices worrying about oversupply, but this is irrelevant to us. The contracts Samsung Bio has secured are not short-term but rather long-term agreements spanning 5–7 years, and the demand for pharmaceuticals continues to grow.”

John Rim’s strategy of securing a technological edge has yielded both advantages and disadvantages. While he has driven rapid company growth through extensive capacity expansion, concerns have been raised that sustained large-scale capital investments may hinder improvements in operating profit margins. Indeed, Samsung Bio’s annual operating profit margin has been on a decline: 34.3% in 2021, 32.8% in 2022, 30.1% in 2023, and 29.0% in 2024.
An industry official commented, “So far, major contract wins have helped mitigate risk factors, but if new investments unexpectedly fail, it could impact the company’s financial stability.”

Kim Nayoung, Korea Finacial Times (steaming@fntimes.com)