Amsung Electronics Co. has merged two of its three business divisions and appoint new leaders to replace its three co-chief executive officers in its biggest management shakeup since 2017.
The reorganization, under the supervision of de-facto leader and Samsung heir Jay Y. Lee, will see the consumer and mobile divisions merged into a newly formed SET Division, led by Jong-Hee Han. Han is promoted from the company's TV research and development team, co-CEOs Dongjin Koh and Hyunsuk Kim, who had previously led the smartphone and consumer appliances groups. Kyehyun Kyung is in charge of the company's Device Solutions group, which includes 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. Jay Y. Lee has a willingness to engage more actively in management. Since being released from prison in August, Lee has been involved in major decisions for the company and recently traveled to the U.S. to announce plans for a $17 billion plant in Taylor, 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 compete with U.S. archrival Apple Inc.
Professor Lee said Apple uses one OS for phones, PCs and TVs and its products show seamless integration. The IT products of Samsung don't have 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 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. According to the latest data from IDC, Samsung is the world's biggest smartphone maker with 20.8% market share.
As part of the reorganization, Samsung also announced that Hark Kyu Park will be its new chief financial officer, having previously held a position in the Device Solutions team.
The shares of Samsung Electronics went up after the announcement, but they are less than 5% down for the year.