As soon as Samsung Vice Chairman Lee Jae-yong was released on parole, he visited Samsung headquarters in Seocho Dong, Seoul. Three top Samsung executives attended the meeting with Lee Jae-young and debriefed him their respective business unit.
According to Infostock Daily's report, three top executives who attended the meeting are Vice Chairman Kim Ki-nam, Head of Semiconductors division, Ko Dong-jin, President of the IM division, and Chung Hyun-ho, Samsung Electronics President overseeing management of subsidiaries and HR.
When Vice Chairman Kim Ki-nam made a report about the semiconductors division, the mood of the meeting was positive. The result of the division has improved remarkably by obtaining the desirable yields on 5-nano chips and receiving a preorder of 200 million Exynos chips. <Refer to [Exclusive] Samsung receives 200 million Exynos pre-orders..Full production in 5 nano process>
The semiconductor investment plan has been approved quickly.
When President Chung Hyun-ho reported, things went smoothly. It took some time to approve the plan to build a Samsung SDI battery factory in the US to compete in the global battery market. President Jung also proposed hiring 40,000 workers.
However, the mood of the meeting became very intense and heavy when President Ko Dong-jin made a report about the IM division. IM division has been struggled last several quarters. The lack of supply for semiconductors has impacted smartphone production negatively and production lines in Vietnam have been suspended due to the COVID-19 breakout. In addition, parts production brought back to the domestic production channel in order to deal with the unstable production value chain in oversea. Such onshore production strategy increased the production cost.
One notable good news is that the newly released foldable 3 series sales is very strong. So, IM division will manufacture 9 million units by the end of this year which is more than the original production plan. <Refer to August 24th [After News] Samsung Electronics expects 9 million foldable phones to be shipped later this year...Parts share price expected to rise>
The global smartphone sales will be strong if the sales in the European market is meeting or exceeding expectation.
However, sales of the telecommunication devices was slashed by half. Thus, Vice Chairman Lee Jae-yong asked series of questions and criticize sluggish performance. It is known that Vice Chairman Lee spent so much time and effort in the telecommunication devices sales before his incarceration. Some even say that Vice Chairman Lee's flight mileage for telecommunication equipment sales is enough to go around the globe several times.
However, rather than filling the tight gap created by U.S. government's sanctions on Huawei, they lost the U.S. 5G equipment market shares to Europe's Nokia and Ericsson.
President Koh couldn't come up with a strong plan for the market recovery. That is why Vice Chairman Lee questioned a lot and made critical comments.
Since telecommunication equipment business is a typical B2B market and recurring sales is guaranteed when the new generation of communication technology is introduced. So, losing the leading position in that market to Nokia and Ericsson was a huge blow.
President Koh enjoyed a huge success in foldable phone series sales, however he now has to turn around the telecommunication network equipment sales.
With the expectation that the Samsung Group's reorganization will be at an all-time high at the end of this year, many wonder if President Ko will retain his position after the upcoming group-wide reorganization.
Reporter Lee Ji-sun stockmk2020@gmail.com
