Compiled by Semiconductor Industry Insights (ID: ICVIEWS)

Samsung's chip head Jeon Young-hyun takes direct charge of memory, while the foundry head is replaced.

Samsung Electronics announced a significant reorganization of its executive leadership, maintaining a dual-CEO structure. Vice Chairman Jeon Young-hyun, head of the Device Solutions (DS) division and semiconductors, will serve as co-CEO alongside Vice Chairman Han Jong-hee. Announced on November 27, this move aims to address the ongoing crisis in the AI semiconductor business, particularly high-bandwidth memory (HBM), and enhance the company's competitive edge in the global market.

Investors remain cautious about Samsung's ability to reclaim its footing in the HBM chip market, essential for training AI models in tandem with NVIDIA accelerators. Samsung's latest products have struggled to gain NVIDIA certification, granting an unusually long window for competitors SK Hynix and Micron to gain a substantial lead in this lucrative field.

Samsung Electronics still faces the risk of sluggish mobile chip sales while contending with increasing supplies of mature chips from China. It also fails to compete with TSMC in foundry chip manufacturing and faces fierce competition in the sluggish smartphone market.

Jeon Young-hyun apologized for Samsung's disappointing October performance and warned that the company must change its workplace culture and processes.

As part of a global layoff plan affecting thousands, Samsung has reportedly begun layoffs in Southeast Asia, Australia, and New Zealand. In November, Samsung announced plans to repurchase around KRW 10 trillion ($7.1 billion) worth of its own shares over the next year.

Restructuring Leadership

The memory division will now report directly to co-CEO Jeon Young-hyun, who also heads Samsung Advanced Institute of Technology (SAIT). The current head of the memory division, Lee Jung-bae, will step down and take on an advisory role. This reflects the company's strategic focus on overcoming challenges in the semiconductor sector.

Samsung also appointed a new head for the foundry division, Han Jin-man, signaling a shift in leadership to drive innovation and efficiency in semiconductor contract manufacturing.

Han Jin-man, Executive Vice President of Integrated Management at Samsung DS Division DSA, has been promoted to President. Renowned for his technical expertise and business acumen, Han has led DRAM/Flash design teams, SSD development teams, and the strategic marketing office. His promotion underscores Samsung's commitment to leveraging experienced leaders to navigate the complexities of the semiconductor industry.

Samsung Electronics has also created new president-level positions for the foundry and DS divisions. Nam Seok-woo, an expert in semiconductor process development and manufacturing, will serve as CTO of the foundry division. Kim Yong-kwan, a strategic planning expert, will head the management strategy under the DS division.

Han Jong-hee will continue as head of the Device Experience (DX) division and Chair of the Quality Innovation Committee. Chung Hyun-ho, Vice Chairman and head of the Business Support Task Force, will also retain his position.

Other changes include Ko Han-seung, President and CEO of Samsung Bioepis, taking on the role of President of Samsung Electronics' Future Business Planning. Park Hak-kyu, head of management support in the DX division, will become President of the Business Support Task Force. Additionally, Lee Young-hee, President of Samsung Electronics, will transition from head of global marketing in the DX division to a member of the Brand Strategy Committee.

Samsung Electronics stated, "To overcome the uncertain business environment domestically and internationally and achieve new growth, we have shifted the memory division to report directly to the CEO and replaced the head of the foundry business." The company added, "We have restructured and assigned new business development tasks to seasoned presidents with proven management capabilities."

Samsung plans to finalize and announce executive appointments for 2025 and organizational restructuring for executives below the vice president level soon. Given the increased global business uncertainty, the scale of executive promotions is expected to be smaller than in previous years. While Samsung Electronics typically conducts CEO personnel, executive personnel, and organizational restructuring sequentially in early December, the 2023 personnel adjustments were made at the end of November, about a week earlier than usual.

It is understood that the 2024 personnel appointment period has also been slightly advanced to overcome a series of crises and prepare for the future. Lee Jae-yong, Chairman of Samsung Electronics, stated, "I am well aware of the significant concerns regarding Samsung's future, but this is a situation we must overcome. Receiving loving criticism and encouragement has only strengthened my resolve to manage the company."

The year-end personnel adjustments for 2024 are expected to involve large-scale personnel reforms and organizational restructuring centered on restoring fundamental competitiveness. Especially in the DS division, due to poor performance, substantial personnel reforms and organizational restructuring are anticipated. It is understood that there is a high possibility of replacing some business heads.

However, it is expected that the "dual-top management" system of Han Jong-hee, head of the DX division, and Jeon Young-hyun, head of the DS division, will be maintained.

However, some have expressed that Lee Jae-yong's "judicial risks" still exist, making large-scale personnel reforms challenging.

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