Samsung to merge mobile, electronic division; names new CEOs
After Vice Chairman Jay Y Lee was paroled from a bribery sentence in August, the broad move is the latest evidence of centralised change at the world's largest memory chip and smartphone maker.
FollowSamsung announced on Tuesday that it would merge its mobile and consumer electronics businesses and appoint new co-CEOs in its most significant reorganisation since 2017 to streamline its structure and focus on boosting its logic chip business. After Vice Chairman Jay Y Lee was paroled from a bribery sentence in August, the broad move is the latest evidence of centralised change at the world's largest memory chip and smartphone maker.
Han Jong-hee, the leader of the visual display business, has been appointed to vice chairman and co-CEO and will supervise the newly combined division covering mobile and consumer electronics and continue to run the TV business. Han rose through Samsung's visual display division ranks despite having no prior expertise with mobile. Analysts are divided into what kinds of reforms or divisions of labour to expect under Han.
Kyung Kye-Hyun, CEO of Samsung Electro-Mechanics, has been chosen co-CEO of Samsung Electronics and will be in charge of the chip and components division. The newly amalgamated companies are of varying sizes. In the July-September quarter, the mobile company earned KRW 3.36 trillion (approximately Rs 21,400 crores) in operating profit, compared to 760 billion won in consumer electronics.
According to Yuanta Securities Korea analyst Lee Jae-Yun, the restructuring might help Samsung deal with issues in its mobile and consumer electronics divisions, such as better linking devices to appliances on a platform that catches and retains users. However, more immediate problems include a scarcity of semiconductor supply, increased raw material prices, logistical challenges, and rivalry from Apple and Chinese rivals.
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Chung Hyun-ho, the leader of a "task force" that observers say is a core coordinating unit for decision-making in Samsung Electronics and affiliate firms, was also named vice chairman.
The Samsung Group intends to invest $206 billion on semiconductors, artificial intelligence, robotics, and biopharmaceuticals over the next three years. By spending over $150 billion in logic chip industries, including foundries, the group's flagship Samsung Electronics aims to overtake TSMC to become No. 1 in semiconductor contract manufacturing by 2030.
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