Hopes for new Samsung chairman

Samsung Electronics appointed Lee Jae-yong as chairman in a board meeting Thursday. The decision came 10 years after his promotion to vice chairman of the largest company in Korea in December 2012 and two years after the death of his father, Chairman Lee Kun-hee. Board members said they reached the decision because of the desperate need to boost responsible management for the company, ensure stable management and make corporate decisions fast amidst the worsening economic conditions at home and abroad.

New Chairman Lee took the helm of the company quietly even without holding an inaugural ceremony. But his promotion carries great significance for the corporate sector in Korea. He has been playing the role of chairman so far, but he will officially serve as head of “new Samsung” from now. Lee is expected to materialize his visions — such as a colossal revamp of top positions and company organizations as well as the establishment of a new command center — to pave the way for future prosperity for the company.

He suggested such visions on September 25, the second anniversary of the death of his farsighted father. “Regrettably, we could not move forward in the past several years. We are facing tough challenges from strong chasers in the market. Let’s build a super company beyond Samsung so that the new company can be loved by Koreans and foreigners alike. I will stay at the forefront of the crusade,” he said.

As board members mentioned, new Samsung Electronics faces tough challenges, including the ever-worsening external conditions for the company and the Korean economy. On the day of Lee’s promotion, Samsung Electronics announced its operating profits in the third quarter shrank more than 30 percent on year. The losses primarily originated from the semiconductor division. The prospects for the fourth quarters are not that bright either due to the declining demand from global IT companies and the falling prices of memory chips.

The hardship Samsung Electronics faces directly translates into a peril for the Korean economy. Samsung Electronics generates about 20 percent of the country’s exports. In the wake of the fierce technology contest between the U.S. and China, however, Samsung Electronics has had difficulty in exporting quality chips to China. Lately, TSMC has replaced Samsung as No.1 chip supplier.

SK hynix, a runner-up to Samsung, saw its operating profit plunge by 60.3 percent on year. If the semiconductor sector shakes, the economy shakes. We hope Samsung under the new commander weathers the storm that has just started to gather.