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The Korea Herald
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THE INVESTOR
April 24, 2024

Market Now

Samsung sets up control tower for new growth drivers

  • PUBLISHED :November 28, 2023 - 09:30
  • UPDATED :November 28, 2023 - 09:30
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Samsung Electronics President Yong Seok-woo of the visual display business (left) and President Kim Won-kyong of the global public affairs office (Yonhap)

 

Samsung Electronics announced the establishment of a new team in charge of exploring future business items, appointing a top-level Samsung veteran as the team's inaugural head in the company's annual leadership reshuffle Monday.

No changes were made in the company's two-CEO system, with Han Jong-hee and Kyung Kye-hyun maintaining their respective seats as device and chip business division chiefs.

Industry sources say the tech giant has opted for stability rather than seeking a drastic shake-up in management amid growing uncertainties surrounding the global economy and geopolitical landscape.

Samsung appointed Vice Chairman Jun Young-hyun as the head of the new future business planning team. Jun is currently the chairman of Samsung SDI's board of directors.

The newly built team will report directly to Han, who is the chief of the company's device experience (DX) division covering smartphones and home appliances.

The new team will be focused on finding new business items for the tech giant's future growth, aiding the existing business support task force that is responsible for the company's strategy planning, merger and acquisitions, and personnel appointment for Samsung's affiliates, according to a company official.

The business task force was established last year with some 30 finance and strategy specialists, taking the place of the company's future strategy office, a control tower team that was abolished in 2017 after it was found to be involved in the highly publicized influence-peddling scandal of former President Park Geun-hye in 2017.

The new future business planning team is expected to play a similar role as a "new business promotion" team, which was under the future strategy office and picked out the five future business items for Samsung to develop in the 2000s and 2010s. The five items chosen at the time were solar energy, light-emitting diodes, batteries for cars, biopharmaceuticals and medical devices.

According to Samsung, Jun is a figure who led Samsung's memory chip and battery business to achieve a world-class standard.

"Samsung is establishing a future business planning team led by the vice chairman to explore new business areas that are not related to our existing businesses," Samsung said in a press release.

 

Samsung Electronics Vice Chairman Jun Young-hyun was appointed to lead a new future business planning team, Monday. (Yonhap)

The latest reshuffle also signals a generational shift in Samsung, with the appointment of the first executive president born in the 1970s.

Samsung promoted Executive Vice President Yong Seok-woo, born in 1970, to the position of president, seeing him take over the visual display business from Han, the vice chairman.

Samsung Vice Chairman Kyung Kye-hyun who heads the device solution in charge of the company's semiconductor business, will also double as the head of Samsung Advanced Institute of Technology, replacing President Jin Gyo-young.

Samsung also promoted Kim Won-kyong, an executive vice president, to head the Global Public Affairs Office.

Kim was in charge of the mobile device business within the global public affairs team, which was launched in 2018. Kim is a trade and commerce specialist who served as a general director at Seoul's Ministry of Foreign Affairs before joining Samsung in 2012.

Samsung Electronics Chairman Lee Jae-yong speaks to reporters at Gimpo Airport on Monday. (Yonhap)

The latest reshuffle comes amid Samsung's poor earnings record suffering from sluggish demand and the possibility of a leadership vacuum as the company's chairman faces a decisive ruling.

In the latest earnings report for the July-September period, Samsung said it recorded sales of 67.4 trillion won ($49.6 billion) and an operating profit of 2.43 trillion won on a consolidated basis, down by 12 percent and 77.6 percent on-year, respectively.

Earlier this month, the prosecutors demanded a five-year prison term and a fine of 500 million won for Samsung Electronics Chairman Lee Jae-yong, alleging his involvement in stock price rigging and accounting fraud connected to the controversial 2015 merger of two Samsung affiliates -- Cheil Industries and Samsung C&T Corp.

The final ruling is expected on Jan. 26, 2024. The case could possibly continue for three or four years if Lee appeals the ruling.

On Monday, Lee returned from his trip to Britain and France accompanying President Yoon Suk Yeol as a member of a presidential delegation.

By Jo He-rim  (herim@heraldcorp.com)

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