Thu. Jan 20th, 2022

Samsung Electronics recreated its management for the first time in four years as it sharpened its pursuit of non-memory chips and artificial intelligence.

The uproar comes when Lee Jae-yong, the group’s third-generation heir, began playing an active management role four months after he released from prison.

Lee, who spent 19 months in jail for bribing former president Park Geun-hye, is still facing charges of inventory manipulation linked to the 2015 merger of two Samsung units designed to consolidate its control.

He is expected to meet customers of Samsung’s 5G telecommunications and construction companies on a trip to the Middle East following a high-profile visit to the US last month.

After Lee’s trip, Samsung announced that it was $ 17 billion disk plant in Texas to help Washington expand U.S. chip production, a national security priority for Joe Biden’s administration.

Lee’s upheaval set on Tuesday includes the merger of Samsung’s consumer electronics and mobile divisions to rival Apple to tackle, which boasts a fully integrated range of devices. He promoted Han Jong-hee, head of Samsung’s visual display business, to take control of the new division.

Han, an expert in television research and development, has played a critical role in maintaining Samsung’s leadership in the global TV market for the past 15 years, helping the group to explosive sales growth during the coronavirus pandemic.

“Lee apparently wants Han’s TV expertise to be used for the mobile business, including folding phones, as Samsung’s mobile division loses its market share,” said Kim Young-woo, an analyst at SK Securities. “They also want to create synergies by integrating devices.”

Kyung Kye-hyun, CEO of the affiliated Samsung Electro-Mechanics, will head the chip business, which is responsible for almost two thirds of the company’s operating profit.

Samsung is working to strengthen its non-memory chip business as the company struggles to catch up with Taiwanese competitor TSMC in contract chip manufacturing. Non-memory chips are used to process data such as application processors in smartphones.

Kyung is a memory chip designer with experience in chip packaging. “Its design and packaging expertise in chipmaking can help Samsung focus on making new chipset for artificial intelligence or self-driving,” Kim said.

Shortly after Lee was paroled in August, Samsung Group announced a $ 206 billion three-year investment plan to expand its footprint in semiconductors, biopharmaceutical products, artificial intelligence and robotics.

Samsung shares rose 0.66 percent on Tuesday morning, but fell about 15 percent from a January peak due to investors’ concerns about possible microchip oversupply next year and a lack of a clear long-term growth strategy.

The company is also facing increasing investor pressure for more efficient capital allocation than its cash heap reaches $ 102 billion in the third quarter, which puts its potential capacity for megatransactions on an equal footing with SoftBank’s Vision Fund, the technology investment instrument.

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