SEOULAs Jay Y. Lee takes over as chairman of Samsung Electronics (OTC:SSNLF), he will be in charge of building on his father’s work, which turned a company that made copies of appliances into the world’s largest chip and smartphone maker.
Samsung (KS:005930) said on Thursday that its board of directors has named Lee as executive chairman. This is a symbolic move that shows that South Korea’s most valuable company will be officially run by the third generation of its founding family.
The appointment came after he was released from prison last year on bribery charges, for which he was later pardoned. This meant that he could officially take over the role of leader that he had been filling since his father, the late patriarch and Samsung Group chairman Lee Kun-hee, was hospitalised in 2014. The elder Lee died in 2020.
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Since 2012, Lee, who is 54 years old, has been the vice chairman of Samsung Electronics, which is the crown jewel of South Korea’s largest business conglomerate.
Lee said in a memo to Samsung employees on Thursday, “As I think about his (Lee senior’s) life, I feel a deep sense of responsibility to keep his legacy alive and build on it for our future.”
“We are definitely at a turning point…
Now is the time to decide what to do next. Now is the time to act, be brave, and keep our eyes on the goal. ”
Samsung, a global tech giant worth $280 billion, is having a hard time doing business because there is a sharp drop in tech demand around the world. This is due to rising inflation, interest rates, and a bleak economic outlook.
On Thursday, Samsung said that its profit for the third quarter fell 31% and that geopolitical uncertainty was likely to keep demand down until early 2023.
Seoul National University’s Kyungmook Lee, a professor at Seoul National University’s Graduate School of Business, said that the new chairman should focus on businesses with the most growth potential, like contract chip manufacturing, and new areas, like artificial intelligence.
Also, Samsung is still pretty top-down, “co-author of “The Samsung Way,” Kyungmook Lee said. “He has to change the company’s way of doing things to fit the times.”
During the time of the late Lee, the groundwork was laid for Samsung to become the top company in the world for memory chips, smartphones, and TVs.
Semiconductors are still its biggest source of income, but business has become much harder because the U.S. is trying to stop China from getting ahead in chip technology.
That is a big business risk for Samsung, which has big markets in both China and the US.
Lee is putting the growth of Samsung’s foundry business at the top of his list of priorities. He wants to make contract chip manufacturing a big source of revenue and knock Taiwan’s TSMC off the top spot in logic chips by 2030.
But the plan is off to a rough start because the new process has low production yields, which has led some clients to complain in the past few years.
Samsung also wants to grow its businesses in biopharmaceuticals and 5G networking equipment.
OUT OF JAIL
Since joining Samsung in 1991, more than 30 years ago, Lee has held a number of important positions, such as chief operating officer and vice chairman. He has also been in charge of key businesses, such as a flat-screen joint venture with Sony (NYSE:SONY) Group Corp. that has since ended.
Some people say Lee doesn’t have any experience, doesn’t have his father’s charm, and hasn’t done anything big that stands out.
“Up until now, Lee hasn’t really shown his own way of managing,” said Park Ju-gun, head of the analysis firm Leaders Index.
But people who work at Samsung say that Lee’s cool, quiet demeanour hides a steely determination that he will need to grow the company.
Lee has stayed out of the spotlight most of the time. He doesn’t have an official Twitter or Facebook (NASDAQ:META) account, and outside of the company, not much is known about him except that he got divorced in 2009.
Lee has an East Asian history degree from Seoul National University and an MBA from Keio University in Japan.
Lee was an only child, so his father taught him how to run the core business of Samsung Group, which was started by his grandfather in 1938. But legal problems in the last few years forced him to stop being in charge of the front line.
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At the end of 2016, he had to deal with a bribery trial and conviction that put him in jail for 18 months. He was put on probation last year and was finally let off in August. This gave him more freedom in his job as a manager.
Lee has gotten out of most of his legal problems, but he is still being tried on fraud and stock manipulation charges, which is a big worry.
As he left a court hearing on Thursday, he told reporters, “My shoulders have become very heavy.” “I will make a company that people love and trust a little bit more.”
Even though the benchmark index went up by 1.5%, Samsung shares didn’t do as well as the index as a whole. Shares of Samsung C&T, a company that works in construction and in which Lee owns 18%, went up as much as 7.1%.
