The Supply Chain Matters highlights reports of a major corporate restructuring involving Samsung, placing the conglomerate’s electronics components and semiconductor business as the engine for future growth and profitability.

 

In a stunning and characterized surprise move, Samsung is reportedly combining two of its operating divisions while replacing the individual heads of its existing three business units.

In its reporting, Bloomberg characterized the move as Samsung’s biggest management shake-up since 2017.

The company’s consumer and mobile operating divisions are to be merged into a newly formed SET Division to be led by Jong-Hee Han, who was promoted from the firm’s television research and development team. According to Bloomberg, this move was reportedly made to allow Samsung to better integrate advanced technologies across all of the company’s consumer focused devices, similar to Apple.

Senior executive Kyehyun Kyung is stepping in to lead the company’s Device Solutions group, the Samsung components business, which will encompass semiconductor business lines including memory, logic processors and chipmaking for outside customers. Kim Ki-nam, the now former CEO of the components business will reportedly become chairman of Samsung’s Advanced Institute of Technology, the company’s research and development arm.

The Wall Street Journal characterized this move to allow the company to better compete against global semiconductor fabrication producer TSMC for advanced semiconductor chip development as well as fend off existing rivals.

According to multiple reports the restructuring has been facilitated by the company’s de-factor heir Jay Y. Lee. In a statement, the company indicated that the new CEOs would lead the next phase of business growth while strengthening business competitiveness.

This move is being interpreted as being an acknowledgement that electronic components and semiconductor business operating profits remain the engine of future growth in the coming years. In the company’s most recent quarter, upwards of three quarters of overall operating profits originated from Samsung’s components division that includes semiconductor devices, memory and electronic components.

 

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