samsung Electronics Co Ltd will merge its mobile and consumer electronics divisions, the firm said on Tuesday, naming new co-CEOs in the biggest reshuffle since 2017, simplifying its structure and focusing on the logic chip business. for.
Two co-CEOs, instead of three, will lead the South Korean firm as it builds on two business pillars of chips and consumer devices, including smartphones, to help lead the next phase of growth and boost competition.
Samsung, whose Galaxy flagship brand helped it become the world’s largest smartphone maker by volume, is looking to revive slow mobile growth, whose profit contribution declined to 21% from nearly 70% in the previous quarter, which was at its peak in the early 2010s.
Instead, its components business, led by chips, has become the most profitable due to a boom in data storage and recent shortages of global semiconductor supply.
The business generated nearly three-quarters of Samsung’s $15.8 trillion ($13.4 billion) operating profit in the previous quarter.
Samsung said its head of visual display business Han Jong-hee will become a co-CEO, continuing to lead the newly merged division in mobile and consumer electronics as well as the television business.
Han has risen through the ranks in Samsung’s visual display business, without experience in mobile.
It’s not immediately clear what changes or divisions of labor were expected under Han, but analysts said the reshuffle could help Samsung address challenges such as offering seamlessly connected services between its smartphones and home devices. Is.
“In the long term, the biggest challenge is building Samsung’s own platform,” said Lee Jae-eun, an analyst at Yunta Securities Korea.
“Those businesses want to increase connectivity between devices, but so far haven’t been able to build a sustainable platform with this presence.”
Analysts said the more immediate problems are amid concerns about a lack of chip supply, rising raw material prices, logistics difficulties, and slowing mobile market competition from Apple Inc. and Chinese rivals.
The group is focusing on sectors ranging from semiconductors, artificial intelligence and robotics to biopharmaceuticals, with plans to invest 240 trillion won ($206 billion) in these areas over the next three years.
Group flagship Samsung Electronics aims to make TSMC the No. 1 in chip contract manufacturing by 2030 by investing nearly $150 billion in logic chip businesses, including foundries.
Late last month, Samsung selected the US city of Taylor, Texas, for a $17 billion chip plant after months of deliberation, coinciding with Lee’s first business trip to the United States in five years.
This story has been published without modification in text from a wire agency feed. Only the title has been changed.
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