ÜSurprisingly, Samsung Electronics, a global heavyweight in consumer electronics and computer chips, has replaced top management. With the change in personnel, the company is also integrating the fields of consumer electronics and mobile devices. The decisions are seen as a sign that Samsung Electronics wants to focus more on the company’s other mainstay, the business with components such as semiconductors and memory chips. At the same time, the generation change in management shows that the vice president, heir to Samsung, Lee Jae-yong, is increasingly making his mark on the company.
For the most important South Korean company, this was the first management change at the top in four years. In the past few years, Samsung has focused on continuity in management because Lee, the grandson of the Samsung founder, has had to deal with elimination. In August, 53-year-old Lee was released from prison. He was convicted of bribery in connection with the scandal of former President Park Geun-hye.
Jong-Hee Han will head the new SET division, which brings together the consumer electronics and mobile divisions. The 59-year-old director is a TV veteran. Han takes over from Koh Dong-jin and Kim Hyunsuk. As Head of Smartphones and Other Mobile Devices Division, Koh has achieved a certain level of recognition at the international level. Han was also promoted to vice president.
From now on, 58-year-old Kyung Ki-Hyun will be in charge of the components business, including mainly semiconductors. In this sector, Samsung also supplies competitors such as Apple with screens for smartphones. Samsung describes Kyung as an expert in computer chip design. Recently, he headed a group company that manufactures other components.
From now on, Samsung will only have two instead of three CEOs. The company established the integration of consumer and mobile businesses with synergies that should be strengthened. This may indicate that Samsung Electronics, like its big rival Apple, wants to integrate its smartphones and tablets with TVs and home appliances into a software-based “ecosystem”.
The focus on two major companies, consumers and components, reflects the growing importance of semiconductors to the company. Samsung Electronics is already the largest manufacturer of electronic memory components for computers and smartphones. At the same time, the Koreans want to compete with the leading manufacturer of logic chips, Taiwan Semiconductor Manufacturing Corporation (TSMC).
Televisions have led Samsung’s business for about 20 years, followed by smartphones in the past decade. Semiconductors are now gaining weight, similar to Japanese rival Sony, which is strong in the image sensor business. In the first three quarters of the fiscal year, semiconductors contributed a third of sales and more than half of Samsung’s operating profit.
Samsung invests heavily in chips and robotics
Vice Chairman Lee wants to promote this area. In August, days after Lee was released from prison, the company announced that it would invest 240 trillion won over the next three years in semiconductors, robotics, artificial intelligence and biopharmaceuticals. Samsung previously announced that it would invest about 171 trillion won in expanding computer chip production by 2030. Lee visited the United States last month on his first trip abroad after his release from prison. There, Samsung will build a new semiconductor plant in Texas for $17 billion.
The legal problems of the vice president of Samsung Electronics are not over yet. Actions are still pending against Lee in South Korea for manipulating stock prices. It is about merging two companies of the Samsung group, which, according to observers in Seoul, have, among other things, strengthened the influence of the founding family on the Samsung group by transferring the inheritance to Lee Jae-yong.
Lee retained the title of Vice Chairman of the Board of Directors of Samsung Electronics on Thursday. He has held the position since December 2012. The position of Chairman of Samsung Electronics is still vacant after Lee’s father, Lee Kun-hee, passed away in October after years of hospitalization.
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