Samsung Electronics poised to revamp struggling chip biz

SEOUL, May 21 (Yonhap) -- Samsung Electronics Co. on Tuesday replaced the head of its semiconductor business in an unexpected move signaling a company-wide revamp to regain its leadership in the high-bandwidth memory (HBM) market.

Vice Chairman Jun Young-hyun was appointed as the new head of the key unit of the world's largest memory chip maker, while Kyung Kye-hyun, who previously led the unit, will transition to the future business planning unit, according to the company.

The new appointment, made a few months after its annual executive reshuffle late last year, seemed to be driven by an urgent need for change in leadership amid the rapidly changing global chip market.

While posting an annual loss of 15 trillion won (US$11 billion) last year amid waning demand for IT products, in particular, Samsung Electronics has hesitated to reduce memory production, resulting in a massive loss.

Moreover, the chip giant has lost its leadership in HBM, a high-performance DRAM that is in high demand as the artificial intelligence (AI) market expands.

Its rival SK hynix Inc. is leading the HBM market with a market share of 53 percent last year, while Samsung Electronics accounted for 38 percent.

"Jun was a key player in growing Samsung Electronics' memory chip and battery businesses to the global level," the company said in a statement. "We expect him to overcome the semiconductor crisis based on his rich management experience."

Samsung Electronics said Jun, who joined Samsung Electronics in 2000, has extensive experience in the semiconductor and battery sectors.

After leading the development of DRAM and NAND flash memories in the chip division, he took over Samsung SDI Co. in 2017, helping the battery maker shift to the black in 2020 and become a major player in the global market.

Jun is expected to focus on enhancing the competitiveness of the company's semiconductor unit through technological innovation and organizational reform.

Samsung Electronics' chip business has struggled with sluggish sales for the past few years, logging an operating loss of over 15 trillion won last year. It experienced five consecutive quarters of operating losses, from the fourth quarter of 2022 to the fourth quarter of 2023.

The poor bottom line was attributable to a downturn in the global chip market and its lackluster response to booming demand for higher-performance AI memory chips like HBM products.

However, in the first quarter of 2024, the chip business rebounded to achieve an operating profit of 1.91 trillion won with 23.1 trillion won in sales, thanks to rising memory chip prices.

To keep up with the booming demand for generative AI, Samsung Electronics is ramping up the mass production of its latest 12-layer HBM3E products within the second quarter.

Samsung Electronics said it will officially appoint Jun as CEO and to the board of directors at a regular shareholders meeting next year.

brk@yna.co.kr
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