In reshuffle Samsung Electronics to merge mobile, consumer units

Samsung Electronics Co Ltd will merge its mobile and consumer electronics divisions and has named new co-chief executive officers in its biggest reshuffle since 2017 to simplify its structure and focus on growing its logic chip business.

The sweeping move announced on Tuesday, is the latest sign of centralised change at the world’s largest memory chip and smartphone maker after Vice Chairman Jay Y Lee was paroled in August from a bribery conviction.

The head of the visual display business, Han Jong-hee, was promoted to vice chairman and co-CEO and will lead the newly merged division spanning mobile and consumer electronics as well as continuing to lead the TV business.

Han has risen through the ranks in Samsung’s visual display business, without experience in the mobile division.

Kyung Kye-Hyun, the CEO of Samsung Electro-Mechanics, was named co-CEO of Samsung Electronics and will lead the chip and components division.

Simplified structure

“Today’s announcement shows the company keeps its performance-driven culture,” said Kyungmook Lee, a professor of business management at Seoul National University. “It also shows Jay Y Lee’s willingness to more actively engage in management.”

Since he was released from prison in August, Lee has gotten involved in significant decisions for the company and recently travelled to the US to conclude and announce plans for a $17bn plant in Taylor, Texas. He is currently on a trip to the Middle East, where Samsung Electronics and Samsung C&T are participating in multiple projects.

The consolidation of consumer offerings under one umbrella simplifies the company’s operational structure and may help the South Korean electronics giant better compete with US archrival Apple Inc.

“Apple uses one OS for phones, PCs and TVs and its products show seamless integration,” professor Lee 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.”

The newly merged businesses differ in size. The mobile business made 3.36 trillion won ($2.84bn) in operating profit in the July-September quarter, compared with consumer electronics’ 760 billion won ($642.7m).

Other high-profile promotions included naming as vice chairman Chung Hyun-ho, the head of a “task force” which analysts said is a central coordination unit for decision-making in Samsung Electronics and affiliate companies.

“There may be more prompt execution of funds or decision-making,” said Kim Sun-woo, an analyst at Meritz Securities.

The last time Samsung Electronics named new CEOs was in late 2017.

Samsung Group is focusing on areas such as semiconductors, artificial intelligence, robotics and biopharmaceuticals, and plans to invest 240 trillion won ($206bn) in these fields in the next three years.

Group flagship Samsung Electronics is aiming to overtake TSMC to become No 1 in chip contract manufacturing by 2030 by investing about $150bn into logic chip businesses including foundries.