Samsung Electronics to merge mobile and consumer electronics divisions

Samsung Electronics Co Ltd said on Tuesday it would merge its mobile and consumer electronics divisions and appointed new chief executive officers in the biggest reshuffle since 2017 to simplify its structure and focus on growing its logic chip business.

The radical move is the latest sign of centralised change at the world's largest memory and smartphone chip maker after vice chairman J.Y. Lee was released on parole in August on bribery charges.

Head of visual displays Han Jong-hee has been appointed vice chairman and co-CEO and will head the newly merged division covering mobile and consumer electronics, and will continue to run the TV business.

Khan has risen through the ranks in Samsung's visual display business with no experience in mobile devices. Analysts say it is unclear what changes or divisions of labour are expected under Han.

Kyung Ke-hyun, CEO of Samsung Electro-Mechanics, has been appointed co-CEO ofSamsung Electronics will head the chip and components division.

The newly merged businesses vary in size. The mobile business posted operating profit of 3.36 trillion won ($2.84 billion) in July-September, compared with 760 billion won in the consumer electronics segment.

The reshuffle could help Samsung address the challenges facing its mobile and consumer electronics business, including improving device connectivity on a platform that attracts and retains customers, according to Lee Jae-yun, a Korean analyst at Yuanta Securities.

But more pressing concerns include a shortage of chip supplies, rising raw material prices, logistical difficulties and competition from Apple Inc and Chinese rivals.

Other high-profile moves include the appointment of deputy chairman Jeong Hyun-ho, head of a "working group" that analysts say is the central coordinating unit for decision-making at Samsung Electronics and subsidiaries.

"Faster execution of funds or decision-making is possible," said Kim Sung-woo, an analyst at Meritz Securities.

Samsung Electronics last named new unit heads in late 2017.

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

Group flagship Samsung Electronics aims to overtake TSMC and become No.1 in contract manufacturing of chips by 2030 by investing about $150 billion in its logic chip business, including foundries.

Late last month, Samsung chose Taylor, Texas, as the location for its $17 billion chip manufacturing plant after months of deliberation, coinciding with Lee's first trip to the US in five years. said Samsung Electronics shares rose 1.6 per cent, compared with a 0.4 per cent rise in the broader market.