Samsung Electronics changes chip chiefs after Chairman Lee confronts ‘crisis’
2024.11.27 02:19
By Hyunjoo Jin and Heekyong Yang
SEOUL (Reuters) -Samsung Electronics sought to inject impetus into its memory and foundry chip units by appointing new leaders on Wednesday, as it scrambles to catch SK Hynix and Taiwan’s TSMC in the booming AI chip market.
The world’s biggest memory chipmaker reavowed its faith in semiconductor chief Jun Young-hyun by naming him co-CEO and bestowing direct control of its struggling memory chip business.
Samsung (KS:) also made U.S. chip head Han Jin-man president and head of its foundry business making customer-designed chips.
However, Samsung kept Chung Hyun-ho, second-in-command to Chairman Jay Y. Lee, as head of its Business Support Task Force and appointed a former CFO as Chung’s deputy. That disappointed some analysts who argued for change among the biggest decision makers whose missteps they said made Samsung slow to embrace AI.
Samsung’s share price closed down 3.4% as the reshuffle did little to calm concern about how the technology giant will navigate risk associated with the protectionist policies of U.S. President-elect Donald Trump.
Even before Trump’s election triumph, Samsung’s stock had been falling due to investor concern that it lags rivals as supplier to leading AI chip designer Nvidia (NASDAQ:).
Chip chief Jun takes on direct oversight of the memory chip business having headed the overall semiconductor division since May in an appointment Samsung said would tackle a “chip crisis”.
Profit in the division plunged 40% in the third quarter from the second, with Samsung saying AI chip business had suffered a delay with a “major” customer – with analysts naming Nvidia as the likely customer. Samsung has since said it has made headway.
The extra responsibility indicates “Samsung is backing Jun’s strategy to regain its competitiveness,” said KB Securities’ head of research Jeff Kim.
Still, with Chung remaining head of the Business Support Task Force – widely regarded as Lee’s de facto secretariat involved in key decision-making – there are questions as to whether the reshuffle will address concerns about leadership, said Park Ju-gun, head of corporate analysis firm Leaders Index.
Joining the Business Support Task Force is President and CFO Park Hark-kyu, with a new CFO yet to be announced.
As well as catching up in AI and stemming a stock price decline, management has to contend with slowing profit growth and intensifying competition from Chinese rivals.
“I am fully aware that there are grave concerns about the future of Samsung recently,” Chairman Lee said this week during a final hearing of an accounting fraud trial where he is a defendant. He has denied wrongdoing.
Wednesday’s appointments also included a new chief technology officer of the foundry business and an executive tasked with finding new growth areas.
Samsung said the reshuffle is aimed at overcoming business uncertainty, revamping its organisation and raising the technological competitiveness of its chip business.
