Samsung’s new chip leader calls for restoring competitiveness  

It is urgent to restore Samsung Electronics Co.'s competitiveness in the semiconductor business, the chip division’s new head said in his first official message to employees since assuming his role in May.

“The DS (Device Solutions) division is faced with an urgent task of restoring its fundamental competitiveness,” Samsung Vice Chairman Jun Young-hyun, in charge of the DS division, wrote in an internal message to staff on Thursday.

Jun delivered his message one day after the South Korean chip giant reported stellar performance of its DS business, which manages the company’s semiconductor business.

On Wednesday, Samsung reported 10.4 trillion won ($7.7 billion) in operating profit for the April-June period, driven by the DS division’s 6.5 trillion won operating profit for the quarter on sales of 28.5 trillion won.

During the first half, Samsung’s chip business raked in 8.4 trillion won in profit, notching a sharp turnaround from its nearly 15 trillion won in losses through 2023.

Jun, however, warned of a vicious cycle of dipping back into the red at the end of a super chip cycle unless fundamental change occurs.

NEED TO ENHANCE COMMUNICATION

“The improvement in second-quarter earnings was largely owed to the recovery in the chip market, not to the recovery of our competitiveness,” said Jun. “Without the restoration of fundamental competitiveness, we will be trapped again in a vicious cycle of repeating last year’s (poor performance).”

As part of rebuilding Samsung’s chip competitiveness, Jun suggested enhancing communication among departments and team members, facilitating open discussion within the organization, opening up about problems, and making decisions and executing them based on data.

“We have to remove communication barriers to facilitate communication among leaders and teams,” he said.

Jun was appointed to lead Samsung’s DS division in a rare mid-year executive reshuffle in May, replacing Kyung Kye-hyun, who had led the DS division as president since 2022. Kyung was said to offer to step down.

Before moving to the DS division, Jun led Samsung’s future business planning unit as vice president.

Jun, 64, is a veteran chip executive who has worked in Samsung Electronics’ DRAM and NAND flash memory development and strategic marketing divisions since 2000.

Since Jun took the helm of the chip business with a vow to overtake crosstown rival SK Hynix Inc., Samsung launched dedicated high-bandwidth memory (HBM) and advanced chip packaging teams in early July.

SK Hynix, the world’s second-largest memory maker behind Samsung, is now the HBM segment leader. Samsung has lost ground to SK Hynix in HBM technology.

The world’s top memory maker pledged to triple its HBM output this year.

It also hinted on Wednesday that its fifth-generation HBM, or HBM3E, would pass quality testing now underway by Nvidia Corp., the world’s top AI chip designer, in the second half of this year.

Write to Eui-Myung Park at uimyung@hankyung.com
Sookyung Seo edited this article.