Samsung Electronics CEO Kwon Announces Shock Resignation as Profits Surge
The shock resignation of Samsung’s chip and show head got here as he was anticipated to take a much bigger position following Lee’s arrest in February and the departures of different key executives within the wake of the bribery scandal.
The transfer got here on the identical day the South Korean smartphone maker forecast file third-quarter working revenue on the again of the reminiscence chip enterprise which Kwon was instrumental in constructing into the world chief.
“The timing is nonsensical. Samsung tipped record earnings, it’s going to be better in the fourth-quarter, and all that’s been driven by Kwon’s components business,” mentioned Park Ju-gun, head of analysis agency CEO Score.
Kwon, 64, is seen as Samsung Group No. 2. As properly as being chairman of the board and a board director, he heads the elements enterprise – together with reminiscence chips – and the show enterprise.
In a press release, the person identified as “Mr Chip” mentioned the time had come to “start anew with new sprit and young leadership”.
“We are fortunately making record earnings right now, but this is the fruit of past decisions and investments; we are not able to even get close to finding new growth engines by reading future trends right now,” he added.
The world’s largest maker of reminiscence chips, smartphones and TVs is ready to smash its annual revenue file this yr, thanks partly to hovering demand for reminiscence chips. Semiconductors had been Samsung’s prime earner within the three months by way of June, making a file eight trillion received ($7.20 billion).
The world chip business is present process a significant shift with Japan’s Toshiba Corp partnering with dwelling rival SK Hynix, and different corporations consolidating looking for new progress areas like synthetic intelligence and cars.
Shares in Samsung, price about $350 billion (roughly Rs. 22,72,017 crores), fell zero.6 % on Friday after hitting an all-time excessive earlier within the day.
Changing the outdated guard
The departure of 32-year Samsung veteran Kwon after 5 years within the prime job comes at a time of management uncertainty on the firm.
Choi Gee-sung, Jay Lee’s mentor, stop earlier this yr for his alleged position within the bribery scandal, and Samsung Electronics now must fill a number of extra key roles with Kwon’s exit.
Kwon would serve out his time period as chairman of the board and board director till March 2018, the corporate mentioned. He can also be not stepping down instantly from his two different roles.
A Samsung Electronics spokeswoman declined touch upon the precise timing of succession and potential successors for Kwon’s roles.
While Samsung Group is South Korea’s prime conglomerate with companies starting from smartphones to motels – it has had no ‘Plan B’ for taking large selections following Lee’s arrest, individuals conversant in the matter have mentioned.
“I’m worried about a leadership vacuum at a time when Lee is absent from management,” Chung Sun-sup, chief govt of analysis agency Chaebul.com, mentioned following Kwon’s announcement.
The management modifications additionally might be a possibility for a brand new era to emerge, he added.
© Thomson Reuters 2017