Samsung heads into new frontier

The faces inside Korea’s conglomerates is a weekly series about key figures in major conglomerates to help readers understand Korea’s business world.

Korea, which has the world’s 13th-largest economy, may not be well known in some parts of the world, but Samsung has become a household name just about everywhere.

With $75.76 billion in annual exports and 59 affiliates, Samsung Group’s logo can be found on Chelsea Football Club’s game jerseys and a billboard in the middle of Manhattan. Its liquid-crystal display monitors cover the walls of the Austrian Belvedere Museum in Vienna. The world’s tallest building, which is under construction in the United Arab Emirates, is being built by Samsung C&T Corporation, Samsung’s construction arm.

Samsung Group accounted for 20.4 percent of Korea’s total exports last year.

The conglomerate underwent sweeping changes to its corporate governance earlier this year after Samsung Group Chairman Lee Kun-hee stepped down from his post in April. Samsung also dismantled its 50-year-old Strategic Planning Office, the group’s control tower. Some said the changes would weaken the group, which employes 260,000.

But Samsung Group proved its strong fundamentals after the reform. Industry experts say former Chairman Lee’s philosophy, which emphasized human resources, prepared Samsung for the change.

Star CEOs of Samsung Electronics, a flagship unit of the group, are filling the void left by former Chairman Lee. A majority of the CEOs graduated from Seoul National University and majored in electronic and electrical engineering.

The former chairman believed creative and competent minds are assets and invested a lot to educate new employees.

Koreans coined the term “Samsung Man,” meaning if people spent their career at any Samsung affiliate, they are guaranteed to be the best workers.

Among the first-generation CEOs on former Chairman Lee’s team, Lee Yoon-woo, vice chairman and CEO of Samsung Electronics, is often called “the living history” of the nation’s semiconductor industry. Lee is credited with laying the groundwork for Samsung’s chip business.

Samsung jumped into the semiconductor business in 1974, and Lee was one of the key figures who developed the iconic 256K dynamic random access memory in 1984.

Lee also leads the investment committee, which controls investment plans for all Samsung affiliates and finds new business models, with six affiliate presidents.

Since former Chairman Lee’s retirement, a council of 40 Samsung Group affiliate presidents makes important decisions, and two other committees for investment plans and brand management were launched.

Lee Ki-tae, vice chairman in charge of Samsung Electronics’ external relations, is a legendary figure who made Samsung the world’s second-largest handset maker by developing Anycall, Samsung’s mobile phone.

He shares “the bulldozer” nickname with President Lee Myung-bak, according to Hong Ha-sang, author of “Samsung’s Star CEOs.”

Lim Hyung-kyu, president of Samsung’s new business development team, is an old hand at non-memory chips, and bears heavy responsibility for finding new business models such as bio, healthcare and energy for Samsung Electronics.

Lee Sang-wan, president of the LCD division, has been working in the LCD department since the early ’90s.

He helped Samsung lead LCD panel sales in 2002 and from 2006 for five consecutive years under his leadership.

Choi Doh-seok, president of Samsung Electronics’ corporate executive staff division, is a finance expert along with Chu Woo-sik, vice president in charge of investor relations. Choi, who manages Samsung Electronics, which reported sales of 100 trillion won ($75.3 billion) last year, was chosen as Korea’s best chief financial officer by Hong Kong-based FinanceAsia from 2003 to 2005.

As for semiconductors, Samsung has another star - CEO Hwang Chang-gyu, who serves as chief technology officer. Hwang is said to have taken Samsung’s semiconductor business to the next level by developing higher capacity DRAM that is faster than its rivals. Hwang is credited for making “Hwang’s Rule.”

Hwang shortened Moore’s Rule, which says a chip’s integrated circuit doubles every two years, to 18 months. A bigger integrated circuit allows greater chip production.

Kwon Oh-hyun, president of Samsung Electronics’ chip division, is an expert in memory and non-memory chips.

Choi Gee-sung, president of Samsung Electronics’ telecommunication business, has wide knowledge ranging from semiconductors and digital appliances to telecommunications. He also made Samsung the world’s No. 1 LCD TV maker by leading a project to develop the Bordeaux TV in 2006.

Park Jong-woo, president of Samsung’s digital media division, is credited with raising Samsung’s LCD TV market share from 13.5 percent in 2006 to 20.4 percent in the second quarter of this year.

Lee Yoon-woo, Lim Hyung-kyu, Choi Doh-seok and Park Jong-woo were all born in the Youngnam region, which lies in the Gyeongsang provinces. Samsung Group started in Daegu, which is also in the Youngnam region.

Jay Y. Lee, former Chairman Lee’s only son and senior vice president of Samsung Electronics, holds the senior vice president title without belonging to any division. The junior Lee is currently stationed in Shanghai.

By Sung So-young Staff Reporter [so@joongang.co.kr]