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Samsung heir apparent’s power grows

Publication Date : 03-12-2013

 

The key points in Samsung Group’s latest personnel reshuffling are the concentration of power to heir apparent Lee Jay-yong and the desire to maintain the status quo.

The so-called “Lee Jay-yong’s people” who received promotions included memory business chief Jun Dong-soo, who was named chief executive of Samsung SDS, an unlisted affiliate that may now receive a boost with the move.

Samsung SDS is a leading IT service provider in which Lee Jay-yong holds an 11.3 per cent stake. With the stake, the company can provide much-needed capital for the junior Lee by getting listed when the time comes.

“Contrary to speculation that Jun was demoted, he has actually been given the weighty role of leading an affiliate that’s likely to come to the spotlight under Lee Jay-yong,” said one industry watcher close to Samsung.

Jun is reportedly being mentioned as successor to vice chairman Kwon Oh-hyun, who heads Samsung Electronics’ Device Solutions unit.

Naming Kim Ki-nam, president and CEO of Samsung Display, as the new head of Samsung’s memory business, to succeed Jun, was another decision seen as providing further support for the Samsung heir.

Kim’s roots are in memory chips, and he previously served as the head of Samsung Electronics’ Device Solutions semiconductor lab, as well as chief of DRAM development under the memory business unit.

The global semiconductor market is expected to grow by 2.1 per cent in 2014 from this year to reach $297.7 billion, according to World Semiconductor Trade Statistics.

Samsung Display, meanwhile, will be headed by the unit’s executive vice president Park Dong-gun, who may have been given the task of streamlining the affiliate.

“It was a surprise, but now we’re thinking Park was delegated with the job of separating the OLED and LCD units within Samsung Display to focus more on organic light-emitting displays,” said one analyst close to the matter who declined to be identified.

Samsung Display firmly denied rumors of the split within the company.

Another anticipated move was the promotion of Lee Kun-hee’s youngest daughter Seo-hyun, who was named president of Samsung Everland, the de facto holding company of Samsung Group. She is to oversee the fashion unit that was previously under Cheil Industries.

With the move, coupled with the decision to place a Samsung Electronics LED executive as head of Cheil, Samsung appeared to be taking the necessary measures to transform Cheil into a parts and materials supplier.

Other than these appointments, the Samsung structure focused on Kwon Oh-hyun remained unchanged. His two leading supporters, mobile chief Shin Jong-kyun and consumer electronics head Yoon Boo-keun, also remained in place.

“This was expected, largely because they haven’t been CEOs for too long, a couple of years less than the required seven to eight years,” said Lee Seung-woo, an analyst with IBK Securities.

Others close to Samsung said the two had been deliberately omitted.

“Shin has a good track record, but many seem to believe it could have been anyone, given the way the market is moving,” said one source.

Yoon, on the other hand, is struggling due to a sluggish market.

Research firm Gartner recently said third-quarter smartphone sales of Samsung, the world’s largest smartphone maker, were 2.6 times those of Apple.

 

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