Samsung Electronics (SSNLF, Financials), the world's biggest memory chipmaker, announced leadership changes on Wednesday to recover competitiveness in the fast-growing artificial intelligence chip sector.
Head of Samsung's semiconductor division since May Jun Young-hyun was designated co-CEO and given direct control of the failing memory chip business of the corporation. The reorganization seeks to solve deteriorating semiconductor division profitability for Samsung, which dropped 40% in the third quarter over the previous one. The business blamed delayed shipments for a big customer for the drop; analysts identified Nvidia as a potential client.
Samsung also elevated Han Jin-man to head of its foundry company—which generates customer-designed chips—and president. Notwithstanding these developments, the business kept close friend of Chairman Jay Y. Lee Chung Hyun-ho in charge of its Business Support Task Force. Critics of the absence of more general changes to senior leadership have questioned whether the business is sufficiently tackling its problems in the competitive artificial intelligence chip industry.
Following the statement, Samsung's shares dropped by single digits indicating investor worries about the company's competitiveness with competitors SK Hynix and Taiwan Semiconductor Manufacturing Company (TSM, Financials).
Under President-elect Donald Trump, the reorganization coincides with growing dangers connected with U.S. protectionist policies and more competition from Chinese semiconductors. Speaking earlier this week at a court hearing on accounting fraud allegations, Chairman Lee said the corporation had "grave concerns about the future of Samsung recently."
A new chief technical officer for Samsung's foundry company and an emphasis on investigating fresh development prospects comprise part of the management upheaval. Some experts, however, are dubious about whether these actions would be sufficient to bring Samsung back into the forefront of the AI chip industry.
Samsung said the changes will reduce business uncertainty and boost semiconductor division competitiveness.
