Samsung Reorganizes Its Electronic Devices Sector, Prioritizing Semiconductor Operations
In a significant shakeup, Samsung unveiled on Tuesday its intentions to combine its mobile and consumer electronics departments, aiming to simplify its structure and concentrate on semiconductor production.
Alongside the restructuring announcement, Samsung also revealed the appointment of two joint CEOs: Kyung Kye-hyun, previously responsible for the flash memory chip and technology division, will oversee the chip and components section, while Han Jong-hee, who was formerly in charge of the visual display business, will serve as co-CEO to steer the newly created mobile and consumer electronics division of the Seoul-based corporation.
Despite recent years seeing Samsung's mobile division's growth slow down, despite its successful Galaxy brand and pioneering foldable phones, its chip division—particularly its chips—has experienced a substantial rise in profitability. This rise, as reported by Reuters, represented nearly three-quarters of Samsung's $13.4 billion operating profit in Q3. Samsung also has large-scale plans to invest in semiconductors, artificial intelligence, and robotics, with a planned investment of $206 billion into these sectors over the next three years.
According to certain analysts, this merge also provides Samsung with its best opportunity yet to seamlessly integrate its services, better placing the company to provide smoother connectivity between its smartphones and household appliances.
As Lee Jae-yun, an analyst at Yuanta Securities Korea, told Reuters, "In the long term, the biggest challenge is creating a platform of Samsung's own. These businesses need to continually improve device connectivity, but so far, it hasn't managed to establish a long-lasting platform with significant presence."
The news follows close on the heels of Samsung revealing plans to invest more than $17 billion in a new semiconductor manufacturing facility in Taylor, Texas, reinforcing its determination to become the leading chip contract manufacturer by 2030, amidst a global semiconductor shortage that was, in part, instigated by the covid-19 pandemic.
The merge of Samsung's mobile and consumer electronics departments is expected to strategically position the tech giant for the future, focusing on advanced semiconductor production. Samsung's future plans include significant investments in semiconductors, artificial intelligence, and robotics, demonstrating its commitment to remaining at the forefront of tech innovation.
