Samsung Electronics Co is combining two of its three business divisions and appointing new leaders to replace its three chief executive officers in its biggest management shakeup since 2017.
The reorganization, decided under the oversight of de facto leader and Samsung heir Jay Y. Lee, would see its consumer and mobile divisions merged into a newly formed SET Division, to be led by Han Jong-hee.
Promoted from the company’s TV research and development team, Han succeeds co-CEOs Dongjin Koh and Hyunsuk Kim, who had led the smartphone and consumer appliances groups respectively.
Kyung Kye-hyun is stepping in to lead the company’s Device Solutions group, which encompasses its key semiconductor business lines, such as memory, logic processors and chipmaking, for outside customers.
“Today’s announcement shows the company keeps its performance-driven culture,” Seoul National University professor of business management Lee Kyung-mook said. “It also shows Jay Y. Lee’s willingness to more actively engage in management.”
Since he was released from prison in August, Jay Y. Lee has gotten involved in major decisions for the company, and recently traveled to the US to conclude and announce plans for a US$17 billion plant in Taylor, Texas.
He is currently on a trip to the Middle East, where Samsung Electronics and Samsung C&T Corp are participating in multiple projects.
The consolidation of consumer offerings under one umbrella simplifies the company’s operational structure and might help the South Korean electronics giant better compete with US archrival Apple Inc.
“Apple uses one OS [operating system] for phones, PCs and TVs, and its products show seamless integration,” Lee Kyung-mook said. “Samsung’s IT products, however, lack such seamless integration between phones and gadgets. The merger between its consumer and mobile divisions, which have until now operated independently, may help fix this issue.”
That the merged SET unit is to be overseen by someone from home appliances rather than the smartphone business suggests that “the company probably thought the mobile unit needs a lot of improvement and consolidation,” Daiwa Securities Capital Markets Korea Co analyst S.K. Kim said.
Samsung remains the world’s biggest smartphone maker, with a 20.8 percent market share, the latest data from IDC Corp showed.
As part of the reorganization, Samsung also announced that Park Hark-kyu is to be its new chief financial officer, having previously held a post in the Device Solutions team.
Samsung Electronics shares rose after the announcement, although they remain more than 5 percent down for the year.
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