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Samsung Promotes Head of Chip Business After Reversing Slump

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Samsung Electronics Co. Vice Chairman Kwon Oh Hyun
Kwon Oh Hyun, newly promoted vice chairman of president of Samsung Electronics Co., seen here as head of the company's computer-memory chip business in Sept. 22, 2009. Photographer: Maurice Tsai/Bloomberg

Dec. 7 (Bloomberg) -- Samsung Electronics Co. named Kwon Oh Hyun, its computer-memory chip business head, as vice chairman after he led the company out of the industry’s worst slump.

Kwon was promoted at Asia’s largest maker of semiconductors in a broad management reshuffle across Samsung Group companies, South Korea’s biggest conglomerate said in an e-mailed statement today. He will continue overseeing chip and display operations at Samsung Electronics, according to the statement.

Samsung Electronics was the only profitable maker of the chips known as DRAM in the third quarter after prices plunged to a record low. The Suwon, South Korea-based company is benefiting from diversification into semiconductors for mobile devices and servers at a time when slowing growth of personal-computer sales has caused other chipmakers to suffer mounting losses.

“Samsung has quickly shifted away from PC chips to specialty chips, so they’ve been relatively unaffected by market conditions,” Kim Young Chan, a Seoul-based analyst at Shinhan Investment Corp., said by telephone. “Going forward, they’ll keep focusing on chips going into mobile products.”

Samsung Electronics rose 1.2 percent to 1.06 million won at the close in Seoul trading, and was the biggest contributor to the benchmark Kospi index’s 0.9 percent advance. The shares have advanced 11 percent this year, compared with the 6.4 percent decline in the benchmark.

Family Members

Jung Yeon Joo, chief executive officer of trading company Samsung C&T Corp., was also promoted to vice chairman, according to the statement. Kim Bong Yung, previously a senior executive vice president at Samsung SDS Co., was promoted to president and appointed chief executive officer of Samsung Everland Inc., the group’s de facto holding company, according to the statement.

Lee Jae Yong, the son of Samsung Electronics Chairman Lee Kun Hee, and his sister Lee Boo Jin were excluded from the latest management changes. Lee Jae Yong was promoted to president at Samsung Electronics a year ago when the sister was named president at Samsung Everland, chief executive officer of affiliate Hotel Shilla Co. and adviser to Samsung C&T.

Kwon “has contributed to strengthening of Samsung’s market leadership in memory products,” the parent company said in the statement, which also credited him for expanding the non-memory business.

Dual Role

Samsung’s chip division had an operating profit of 1.59 trillion won ($1.4 billion) in the third quarter, while its closest rival Hynix Semiconductor Inc. had an operating loss of 276.8 billion won.

Samsung expanded Kwon’s role in July to include oversight of the unprofitable liquid-crystal display business. Kwon has led the chip division since 2008.

The company began operations at its latest factory in South Korea in September. The 12 trillion won facility is the largest in the industry and can produce NAND flash chips used in mobile devices as well as DRAM with the narrowest circuitry in the industry. Samsung plans to build another NAND-flash factory in China.

Samsung began to operate its Austin, Texas, factory’s logic-chip production line at full capacity in October, about five months after operations began, the company said yesterday. The plant makes application processors used in mobile phones.

Operating profit at the company’s logic chip business will probably jump 156 percent to 1.7 trillion won this year and 69 percent next year, according to Korea Investment & Securities.

To contact the reporter on this story: Jun Yang in Seoul at jyang180@bloomberg.net

To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net

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