It happened quickly: Samsung corporate heir and de facto boss Lee Jae-yong was released from prison on parole in August. Now the company has announced a major makeover that bears Lee’s signature. In its electronics division, the conglomerate Samsung is primarily focusing on chip production. In the future, chips will be the responsibility of Kyung Kye-Hyun, who previously headed Samsung Electro-Mechanics. The chip division also makes up the majority of Samsung’s sales.
The cell phone division, on the other hand, will be merged with that for entertainment electronics. Your boss will be Han Jong-Hee, who was previously responsible for Samsung’s display business. Han replaces Koh Dongjin and Kim Hyunsuk, who were responsible for smartphones and consumer electronics.
What is behind this biggest management reorganization since 2017? On the one hand, there is the increasingly difficult business with smartphones. Samsung is still the market leader in this segment, but new competition from China such as Xiaomi or Oppo are pushing forward, and then of course there is also arch-rival Apple, which traditionally achieves higher margins with its iPhones than Samsung or other manufacturers.
Apple has an advantage
Apple also has an advantage in that it controls hardware and software. Samsung, on the other hand, has so far used different operating systems for its devices. On the other hand, it could also be that the conversion should ensure that smartphones, televisions and other consumer electronics, for example, should move closer together – as Apple has been doing for a long time.
The decision is also a clear commitment to Samsung’s chip division. The Koreans already make the most sales with it, and the shortage of these indispensable semiconductors, which is becoming more and more apparent worldwide, makes it only logical that Samsung should get involved here. The group plans to invest more than 150 billion US dollars by 2030. The goal is ambitious: Samsung wants to replace TSMC as the largest chip contract manufacturer in the world.
On the one hand, observers see the drastic changes as evidence that Lee Jae-yong is actively involved in the company’s strategy. He was recently in the United States to announce Samsung’s plans for a chip factory in Taylor, Texas. Samsung will invest 17 billion dollars in this. On the other hand, it also shows that the Samsung company, which has always been tightly run, attaches great importance to performance, the Bloomberg news agency quotes a Korean economist.