Lee visits UAE ahead of fourth anniversary as chairman

Semiconductor boom drives operating profit up ninefold in four years

Strong earnings seen as right moment to unveil 'New Samsung' vision

Year-end personnel reshuffle expected to reflect Lee's organizational blueprint

Losses in consumer electronics division and labor tensions remain key challenges

Samsung Electronics Chairman Lee Jae-yong (second from right) tours a construction site at the Al Dhafra gas-fired power plant in the UAE on Wednesday (local time). [Samsung Electronics]
Samsung Electronics Chairman Lee Jae-yong (second from right) tours a construction site at the Al Dhafra gas-fired power plant in the UAE on Wednesday (local time). [Samsung Electronics]

Samsung Electronics Chairman Lee Jae-yong marks the fourth anniversary of his appointment as chairman on Tuesday. As in previous years, he is keeping a low profile, with no special message or internal ceremony planned.

Lee has been focused on business matters and internal commitments — visiting Samsung's operations in the UAE on Wednesday (local time) and attending a memorial service Friday for his late father, former Chairman Lee Kun-hee, on the sixth anniversary of his death.

Lee was elevated to chairman on Oct. 27, 2022, formally launching the third-generation leadership of the conglomerate. He enters his fourth anniversary in a markedly different environment from when he took the helm.

With the semiconductor business posting unprecedented strength, attention is turning to the organizational reshuffle and personnel changes he is expected to carry out next month. Observers say the moves will reflect his blueprint for a "New Samsung" — his vision for the company's structure and business strategy going forward.

Operating profit up ninefold in four years since Lee took chairmanship

Samsung Electronics' annual operating profit stood at 43 trillion won ($32.5 billion) when Lee became chairman in 2022. This year it is forecast to surpass 370 trillion won — roughly nine times that figure.

The business environment was far from favorable in the early days of his tenure. The semiconductor division, Samsung's core business, posted a loss of nearly 15 trillion won in 2023 due to a memory chip supply glut. In 2024, the company ceded ground in the high-bandwidth memory market to rivals, drawing criticism that it had missed the HBM opportunity.

Even so, Lee kept his focus on medium- to long-term growth. When competitors moved to cut production, he held the line, maintaining Samsung's investment stance and refusing to authorize artificial output reductions.

That bold stance paid off as the AI era arrived. The AI market reached an inflection point when OpenAI launched ChatGPT in late 2022, and Samsung's results followed.

Samsung Electronics has set a new quarterly earnings record every quarter this year — 134 trillion won in sales and 57 trillion won in operating profit in the first quarter, 172 trillion won in sales and 90 trillion won in operating profit in the second, and 195 trillion won in sales and 107 trillion won in operating profit in the third.

The third-quarter operating profit of 107 trillion won significantly exceeded Nvidia's second-quarter operating profit of $63.7 billion, making it the largest quarterly operating profit posted by any global tech company this year. Analysts say Samsung is on track to surpass Nvidia on an annual basis as well and claim the top spot for operating profit among all companies globally.

Eyes on year-end reshuffle as Lee expected to elevate tech talent for 'New Samsung'

With earnings growing at an extraordinary pace, analysts say Lee has arrived at the right moment to demonstrate the vision and capabilities of his "New Samsung" in earnest.

Immediate attention is focused on the upcoming reshuffle of Samsung's president-level executives next month. Lee has long emphasized that technology comes first, second and third, and has consistently promoted performance-driven technical talent amid the AI wave.

Last year's regular executive reshuffle saw him advance a large number of technology leaders and executives in their 30s and 40s to the front lines, with 161 promotions — the largest in three years.

This year, the same approach is expected to continue, with personnel who contributed to HBM business growth moving into prominent roles alongside leaders tapped to drive AI and robotics initiatives.

As the business environment accelerates with the spread of AI, analysts say Lee may move younger talent into frontline management positions ahead of schedule to sharpen the pace of innovation.

However, a lingering conflict between the Device Experience division and the Device Solutions division — which began over bonus disputes — remains an unresolved challenge. Samsung narrowly averted a strike in May after reaching a labor-management agreement on bonuses, but tensions between the two divisions, fueled by a widening gap in their financial performance, have persisted.

The prolonged losses in the Device Experience division, which oversees finished-product businesses, also remain a pressing issue. Outside the regular reshuffle cycle, Lee took the unusual step in May of abruptly replacing the head of the television business in a targeted personnel move, signaling his intent to shake up the division's culture.

The year-end reshuffle is expected to carry a strong message from Lee calling for sweeping reform and competitiveness improvements across the Device Experience division as a whole.


joze@heraldcorp.com
jeongwan@heraldcorp.com