Samsung switches its focus to auto technology

Samsung Electronics announced on Wednesday a new push into the automotive electronics business, the final announcement in a week-long series of reshuffles and reorganizations.

“We will focus on infotainment [information and entertainment] and autonomous driving at the initial stage, with the aim of securing related capacity within a short time span in automotive electronics,” the world’s top smartphone producer said in a statement, “and strengthen partnerships with other affiliates.”

Affiliates cooperating with the group’s electronics arm in the automotive field could be Samsung SDI, Samsung Electro-Mechanics, Samsung SDS and Samsung Display, according to analysts.

The announcement was part of an annual reshuffle that Samsung Group launched on Dec. 1. On Wednesday, the conglomerate wrapped up the annual event, downsizing its so-called Future Strategy Office, a command center that takes care of overall business strategies and affairs related to bedridden Chairman Lee Kun-hee and his family.

Two strategy teams under the Future Strategy Office - one taking care of electronics-related affiliates and the other all other industries - were merged. A task force responsible for advancing the conglomerate’s finance-related businesses was upgraded to a formal team, a signal Samsung would step up its financial businesses.

The new automotive electronics business division at Samsung Electronics, deemed to be a new growth driver to take over from smartphones, will be led by Park Jong-hwan, vice president of the Chip Card & MCU (C&M) business team at the consumer electronics division.

The 54-year-old is a non-engineer - unlike many top managers at Samsung - who earned bachelor’s and master’s degrees in business administration from Yonsei University in Seoul.

The new division will be overseen by Kwon Oh-hyun, vice chairman and CEO of the device solutions (DS) division of Samsung Electronics. The DS division covers semiconductors, the system LSI division and LEDs.

Speculation was rife that Jay Y. Lee, Samsung Electronics vice chairman and acting chairman, would make a strategic decision to re-enter the car business, even though its last attempt, a joint venture with Renault in the late 1990s, failed.

The profitability of smartphones and TVs has decreased in recent years. The company finds it hard to resist facing off with other global giants like Google and Apple, who are already working on driverless vehicles and electric vehicles. Samsung Electronics also shrank the size of its back-offices. Its global marketing division will be downgraded to a global marketing center, and the global cooperation team under the management support division will be placed under the communications team. An investor relations group will report to the management support division.

The world’s No. 1 producer of smartphones, TVs and memory chips named Seo Byeong-sam, vice president and head of global customer service at the consumer electronics division, as head of the digital appliances business. He will be taking over the job occupied by Yoon Boo-keun, president and CEO of Samsung Electronics’ consumer electronics division, until Dec. 1. The week-long overhaul began with presidential-level promotions, followed by an executive reshuffle and lastly, organizational changes. The fewest number of promotions since 2009 was announced, and up to 500 executives were laid off as the economy floundered and the group’s major breadwinner, Samsung Electronics, lost momentum with smartphones, one of its key products.

Koh Dong-jin, the new president of the mobile communications business at Samsung Electronics, vowed in an encounter with reporters at the Samsung Seocho headquarters earlier in the morning to build up a “young and dynamic corporate structure” to catch up with the rapidly changing global market.

Koh was an executive vice president at Samsung Electronics in charge of mobile research and development. Now he is acting commander-in-chief of Samsung’s lucrative yet increasingly challenged smartphone business.

Samsung C&T, the de facto holding company of Samsung Group, completed its post-merger reorganization by tidying up overlapping business sectors in two separate companies that became one in September. Both Cheil Industries and Samsung C&T had separate engineering and construction arms before.

“The essence of the structural reform lies in reinforcing the key competitiveness of respective business divisions and building a foundation for long-term growth by securing new business drivers and creating synergy,” a Samsung C&T spokesman said.

Samsung C&T has four different business divisions, including construction and engineering. The trading and investment division at Samsung C&T remains unchanged, while the fashion division has established a new division that covers overall products.

BY SEO JI-EUN [seo.jieun@joongang.co.kr]