Reorganization of Samsung Gadget Businesses for Chips

by -
Photo: Octavio Jones / Stringer (Getty Images) – To manage the newly integrated phone and consumer electronics segment, the corporation selected two co-CEOs. By merging its mobile and consumer electronics businesses, Samsung aims to streamline its organization so that it can concentrate on chip manufacturing.

Along with the restructuring, Samsung has appointed two new CEOs to lead the company’s chip and component divisions: Kyung Kye-hyun, formerly head of the flash memory chip and technology team, and Han Jong-hee, formerly head of the visual display business, will serve as co-CEOs to lead Samsung’s newly established mobile and consumer electronics divisions.

Galaxy smartphones and foldable phones have helped Samsung’s mobile growth plateau in recent years, but the company’s component arm—and most notably its chips—has seen a significant increase in profits in recent years, accounting for over three-quarters of Samsung operating profit in Q3. According to Reuters, the business expects to spend $206 billion over the next three years on semiconductors, artificial intelligence, and robots.

Samsung’s merger with LG marks the biggest chance yet to completely integrate its services, according to several experts, allowing the business to better link its smartphones and home appliances.

Lee Jae-yun, an analyst at Yuanta Securities Korea, told Reuters that the greatest difficulty for Samsung in the long run is to build a platform of its own. So far, they haven’t been able to build a platform that has a long-term presence.

After Samsung announced plans to invest more than $17 billion in a new semiconductor manufacturing facility in Taylor, Texas just a few weeks ago, the company is now doubling down on plans to become the largest chip contract manufacturer by 2030 amid a global shortage of semiconductors caused in part by the covid-19 pandemic