Thursday, 27 January 2022

Samsung reshuffle sees consumer and mobile units merge

by Harry Baldock, Total Telecom
Tuesday 07 December 21

The business will now be subdivided into the Device Solutions unit, handling semiconductors, and the SET Division, which includes mobile, TV, and consumer electronics

Samsung has not been shy when it comes to organisational restructure over the past decade.    Back back in 2017, then CEO Kwon Oh-hyun resigned, citing an “unprecedented crisis” facing the company. At the time, the company was performing fairly well financially, hence the crisis Kwon is referring to is almost certainly the imprisonment of Samsung chairman Lee Jae…

Samsung has not been shy when it comes to organisational restructure over the past decade. 
 
Back back in 2017, then CEO Kwon Oh-hyun resigned, citing an “unprecedented crisis” facing the company. At the time, the company was performing fairly well financially, hence the crisis Kwon is referring to is almost certainly the imprisonment of Samsung chairman Lee Jae-yong, who was arrested for embezzlement and bribery of South Korean president Park Geun-hye.
 
At this time, Kwon’s resignation led the business to appoint three new CEOs, one for the components business, one for consumer electronics, and another for mobile and IT.
 
Now, Samsung has announced that it is once again undertaking a major structural reorganisation, dividing the company into just two units: Device Solutions, handling semiconductors, and the SET Division, combining the mobile, consumer, and TV business.
 
Kyehyun Kyung, previously CEO of Samsung Electro-Mechanics, will serve as CEO of Device Solutions, while Jong-hee Han, previously head of the TV product business, will be the CEO of the SET Division. 
 
Part of the motivation for this shift is likely the release of Lee Jae-yong, who served a total of 19 months in jail and is now preparing to take an active role in the company once again. 
 
Strategically, the restructure appears to make good sense, showing a shift in focus to the highly profitable semiconductor business. The chip business accounts for around two-thirds of the company’s overall profit and has been a focus for expansion recently, notably with the pledge to build a $17 billion semiconductor fab in Texas, USA. 
 
In August, Samsung announced a new three-year plan that would involve investing around $206 billion in semiconductors, biopharmaceuticals, artificial intelligence and robotics.
 
Meanwhile, the consolidation of the consumer electronics and mobile business should help to simplify the company’s overall operations and “strengthen the synergies among the different businesses”, according to a statement. Part of the motivation here seems to be bringing Jong-hee Han’s expertise from Samsung’s booming TV business into play with the company’s mobile business, which has been losing market share to Apple in recent months. 
 
 

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