Samsung Electronics to merge mobile and consumer electronics divisions

Samsung Electronics Co Ltd said it will merge its mobile and consumer electronics divisions and named new co-CEOs in its biggest reshuffle since 2017, to simplify its structure and focus on growing its logic chip business.

The sweeping move is the latest sign of centralised change at the world’s largest memory chip and smartphone maker, after Vice Chairman Jay Y. Lee was paroled in August from a bribery conviction.

The head of visual display business, Han Jong-hee, was promoted to vice chairman and co-CEO, and will lead the newly merged division spanning mobile and consumer electronics as well as continuing to lead the TV business.

Han has risen through the ranks in Samsung‘s visual display business, without experience in mobile. Analysts said it was unclear what kind of changes or divisions of labour are expected under Han.

Kyung Kye-hyun, CEO of Samsung Electro-Mechanics, was named co-CEO of Samsung Electronics and will lead the chip and components division.

The newly merged businesses differ in size. The mobile business reported 3.36 trillion won ($2.84 billion) in operating profit in the July-September quarter, compared to consumer electronics’ 760 billion won.

The reshuffle could help Samsung deal with challenges facing in its mobile and consumer electronics businesses, including better connecting devices to appliances on a platform which captures and keeps customers, Yuanta Securities Korea analyst Lee Jae-yun said.

But more immediate problems are the shortage of chip supplies, rising raw material prices, logistics difficulties, and competition from Apple Inc and Chinese rivals.

Other high-profile promotions included naming as vice chairman Chung Hyun-ho, the head of a “task force” which analysts said is a central coordination unit for decision-making in Samsung Electronics and affiliate companies.

“There may be more prompt execution of funds or decision-making,” said Kim Sun-woo, an analyst at Meritz Securities.

The last time Samsung Electronics named new division heads was in late 2017.

Samsung Group is focusing on areas such as semiconductors, artificial intelligence, robotics and biopharmaceuticals, and plans to invest 240 trillion won ($206 billion) in these fields in the next three years.

Group flagship Samsung Electronics is aiming to overtake TSMC to become No. 1 in chip contract manufacturing by 2030 by investing about $150 billion into logic chip businesses including foundries.

Late last month, Samsung chose Taylor, Texas as the site of a planned $17 billion U.S. chip plant after months of deliberation, coinciding with Lee’s first business trip to the United States in five years.

Shares in Samsung Electronics rose 1.6% compared to a 0.4% rise in the wider market.

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