Samsung Electronics keeps focus on core businesses

(Kim Ho-young)

South Korean chipmaker Samsung Electronics Co. continues to plan to exit its light-emitting diode (LED) business, a non-core area of the DS division which generates approximately 2 trillion won ($1.48 billion) in annual sales, in a move to focus on its core business areas.

The company’s stock price fell 2.32 percent to 58,800 won on Thursday due to disappointing performance results, which marks the first time in a year and seven months that the price dropped below 60,000 won.

The upcoming executive reshuffling, typically announced in late November to early December, is also expected to be moved up. This raises the possibility of a major personnel reshuffle, given Vice Chairman Jun‘s consistent emphasis on structural improvements and organizational innovation.

The company will also conduct a comprehensive organizational restructuring with a focus on on-site operations. According to sources from the semiconductor industry on Thursday, Samsung’s Device Solutions (DS) division, which is responsible for semiconductors, is considering placing its research and development (R&D) personnel, including those from the equipment technology research center, under the management of the fab, or semiconductor production facility, units.

This move came after DS division head and Vice Chairman Jun Young-hyun said that “technology and quality are our lifeblood and the pride of Samsung Electronics that we cannot compromise on. The only way for Samsung Electronics to rise again is through unprecedented new technology and impeccable quality competitiveness.”

Samsung is preparing for organizational restructuring and human resources reforms to restore its fundamental technological competitiveness and enhance collaboration between facility R&D personnel and field production lines, as well as revise its ‘semiconductor creed,’ which is the DNA of the semiconductor company, according to the sources.

The core focus of the latest reorganization is strengthening collaboration and communication, with a prominent proposal to continuously place R&D teams at production sites.

The company is also considering shifting the authority for employee evaluations from headquarters to the field lines. There is an understanding both inside and outside of the company that close collaboration between development and production is crucial for swiftly developing and mass-producing advanced semiconductors such as high-bandwidth memory (HBM). Samsung’s research organization is currently under the headquarters’ direct control.