Samsung Electronics Co. has combined two of its business divisions, and appointed new leadership to replace the three co-chief executives officers. This is its largest management shakeup since 2017.
Jay Y. Lee (de-facto leader, Samsung heir) supervised the reorganization. The consumer and mobile divisions will merge into a new SET Division to be headed by Jong Hee Han. Promoted from the company’s TV research and development team, Han succeeds co-CEOs Dongjin Koh and Hyunsuk Kim, who had respectively led the smartphone and consumer appliances groups. Kyehyun Kyung 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,” said Kyungmook Lee, professor of business management at Seoul National University. “It also shows Jay Y. Lee’s willingness to more actively engage in management.”
Lee was released in August from prison and has been involved in many major company decisions. He recently visited the United States to announce and conclude plans to build a Taylor plant worth $17 billion in 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 U.S. 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 fact that the merged SET unit will 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,” said Daiwa Securities analyst SK Kim. Samsung remains the world’s biggest smartphone maker with 20.8% market share, according to the latest data from IDC.
Samsung announced Hark Kyu Park, who had previously been a member of the Device Solutions team, as its chief financial officer.
Samsung Electronics shares rose upon the announcement. However, they are more than 5 percent down over the past year.
—With assistance from Min Jeong Lee.