Samsung is undertaking a significant restructuring of its semiconductor business, signaling a strategic shift in response to mounting challenges in the global chip industry. The company plans to drastically reduce executive positions within its chip division, particularly at the president level, as part of efforts to enhance competitiveness.
Earlier this year, Samsung appointed Jun Young-hyun as the new head of its Device Solutions (DS) division, replacing Kyung Kye-hyun. This unusual mid-year executive change shows the company’s concern over its predicament in the semiconductor market. The restructuring includes streamlining the foundry business and reorganizing the Semiconductor Research Center. Samsung is also considering deploying research and development personnel directly to production sites to foster better collaboration between research and manufacturing teams.
The company is withdrawing from non-core businesses, notably its LED division, to concentrate on key areas. The LED business team, responsible for LED modules for TVs, smartphone flashes, and automotive applications, is being phased out despite generating annual sales of about 2 trillion won ($1.48 billion). This move aligns with Samsung’s strategy to focus on sectors deemed critical for future growth. However, the changes don’t apply to digital signage and large format LED displays.
Samsung is also shifting its business focus from automotive chip development to artificial intelligence (AI) chips, reflecting changing priorities in the semiconductor market. The decision comes as the company grapples with declining competitiveness in DRAM technology and lags behind rivals like SK Hynix in the high-bandwidth memory (HBM) market, which is crucial for AI applications.
Financial performance has been a driving factor in the reorganization. Samsung’s chip business has been struggling, with its foundry division reportedly continuing to incur losses. The restructuring aims to restore fundamental technological competitiveness, strengthen collaboration between R&D and production, and improve the company’s position in advanced memory segments, particularly HBM.
