Samsung Electronics announced the second leadership restructuring of its chip division this year on Wednesday. This move reflects the turmoil at the South Korean technology company, which is facing growing concerns about its competitiveness in advanced memory chips essential for artificial intelligence (AI).
Jun Young-hyun, who only took over the leadership of the semiconductor division in May, will now additionally directly lead the memory chip business and simultaneously become Co-CEO of Samsung Electronics. The new head of the foundry division, which manufactures chips for third-party customers, will be Han Jin-man, previously responsible for Samsung's US semiconductor business.
The restructuring is taking place at a critical phase for the world's largest memory chip manufacturer, which is struggling with losses in the foundry business and a growing lag behind market leader TSMC in the production of advanced chips. Analysts are disappointed by the internal focus of the changes. "There is a lack of fresh external talent to truly transform the organization," criticized Park Ju-geun, head of the Leaders Index research institute in Seoul.
The realignment follows a rare public acknowledgment of Samsung’s challenges by heir and chairman Lee Jae-yong. "The reality we face is more challenging than ever, but we will overcome this difficult phase," Lee said on Monday during his trial on charges of accounting fraud and stock manipulation.
Prosecutors demand a five-year prison sentence for Lee, who was last acquitted of these charges in February. Despite the ongoing legal uncertainties, Lee reaffirmed: "I will do everything to make Samsung a company appreciated by the people again.
Samsung has lost market share in high-bandwidth memory (HBM) chips to local rival SK Hynix in recent months, which are critical for Nvidia hardware. Samsung's share price has fallen by more than 25 percent since the beginning of the year. On Wednesday, the shares slipped another 2.9 percent, underperforming the barely changed Kospi index.
Added to this are geopolitical uncertainties: Donald Trump's election as the next US president could lead to stricter export restrictions for semiconductor equipment and memory chip sales to China, where Samsung operates the world's largest NAND flash production facility. Trump's nominated officials have also questioned the billions in subsidies from Joe Biden's Chips Act, from which Samsung could receive up to 6.4 billion USD for investments in Texas.
The new leadership structures are intended to streamline Samsung's decision-making processes and accelerate technological development. But analysts warn that without deep reforms, challenges will persist.
