The head of Samsung is going to cleanse the company of clumsy top management in the chip industry

A decade after third-generation Samsung heir Lee Jae-yong took the helm of the South Korean corporation, he faces the biggest test of his business acumen as he battles the corporate crisis facing the company, the Financial Times reports. .

Samsung is the world’s largest memory chip maker, but it has fallen behind rival SK hynix in a promising new area: HBM memory chips for AI accelerators. The company has also made little progress toward Lee’s plan to surpass Taiwan Semiconductor Manufacturing Company in advanced process technology by 2030. And in sectors such as displays and smartphones where it once dominated, Samsung is losing market share to Chinese rivals.

It didn’t help matters that Samsung faced a worker strike this year over a dispute with the union over pay and working conditions. There’s also a growing wave of criticism from investors, unhappy with the stock’s decline of more than 30% this year, despite a $7.1 billion share buyback announced last week. It should be added that Donald Trump’s victory Trump in the US election and the possibility of upcoming trade conflicts have also brought uncertainty to the outlook for the global technology sector and South Korea, whose economy relies heavily on chip exports and the performance of the country’s most valuable company. “Samsung’s crisis is Korea’s crisis,” emphasizes Park Joo-geun, head of the Leaders Index research group.

Lee Jae-young’s personal history is also controversial. Educated at Harvard Business School, he began his career with the failed e-Samsung project in 2000. He was later involved in a corruption scandal involving former South Korean President Park Geun-hye and spent 19 months in prison. After his release in 2021, he was then acquitted in 2022. Since his release from prison, Lee has strived to project the image of a humble leader, dining in employee cafeterias and taking selfies with workers around the world. “I will work harder to become a responsible businessman,” he said after the pardon. Since 2022, Lee has served as executive chairman of Samsung Electronics, although he is not on its board of directors or on the board of directors of Samsung C&T, the conglomerate’s de facto holding company, possibly due to business restrictions specified in the terms of his parole. .

Park Sangin, an economics professor at Seoul National University, noted Lee’s more cautious management style than that of some other chaebols, the family-owned conglomerates that dominate South Korea’s economy. “Unlike executives at third-generation Hyundai and LG, Lee has not demonstrated any big or bold decisions,” Sangin said. This also differs him from his father, Lee Kun-hee, who at one time declared war on defects in production and, against this background, ordered the destruction of 150 thousand smartphones and other electronics in which defects were discovered. The elder Lee was a supporter of reform.

However, Samsung remains optimistic. The company announced the construction of a new $14.4 billion chip development center and plans to release a competitive HBM4 memory chip in the second half of 2025. In addition, under Lee’s leadership, the company successfully diversified its business into biotechnology and automotive components.

Institutional investors remain confident in Samsung, betting on a rebound in the global memory market amid growing demand for AI infrastructure. However, they insist that the opaque corporate governance structure needs to be reformed.

Samsung Electronics plans to purge the top management of its semiconductor divisions, which, according to analysts, is having difficulty adapting to changes in the global chip market due to the rapid development of AI technologies.