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Samsung unveils new management to quell leadership crisis
[SEOUL] Samsung Electronics, the South Korean tech giant, announced a new slate of executives Tuesday in an effort to bring stability to its top ranks.
The company, a global name in smartphones and microchips, has been suffering from a leadership vacuum. The crown prince of its controlling family was sent to prison this year on bribery charges. The family's patriarch has been in a coma since 2014. Three weeks ago, a senior executive responsible for one of its most successful businesses abruptly resigned.
The troubles at Samsung's management have not diminished its status as an innovative - and highly profitable - powerhouse in the technology world. That point was underscored Tuesday, when the company reported a record-high profit for the second quarter in a row.
But the newly appointed executives, who have been drawn from Samsung's deep ranks of professional managers, could help ensure the company can run while the fate of the powerful family that built the Samsung empire remains under a cloud.
The three executives appointed Tuesday to run Samsung's major business units are Kim Kinam, who will lead its lucrative components business; HS Kim, its new consumer-electronics chief; and DJ Koh, who will lead the mobile-device division. The three men are expected to serve as co-chief executives once they are elevated to the company's board, a decision that requires shareholder approval.
Kim Kinam succeeds Kwon Oh-hyun, who was widely credited with building up the components business - a major revenue driver for Samsung as other smartphone makers bought up its chips and displays.
But in mid-October, Samsung said Mr Kwon planned to retire. Explaining his decision, Mr Kwon said the company was "confronted with unprecedented crisis" and needed new leadership.
Samsung also said Tuesday that its chief financial officer, SH Lee, would become chairman of the board starting in March. Mr Kwon currently holds that position, too, but Samsung said it would separate the two roles for the first time. Mr Lee, who is no relation to the Lees who founded Samsung, will leave his post as finance chief.
Lee Kun-hee, the family patriarch who fell into a coma in 2014, remains chairman of Samsung Electronics, a different position from chairman of the board.
CW Chung, an analyst at Nomura, said the leadership reshuffle was supposed to have taken place last year but was delayed when the heir to the Samsung conglomerate, Lee Jae-yong, was implicated in a political scandal.
In that scandal, Lee Jae-yong and other executives were charged with paying millions of dollars in bribes and other inducements to win the backing of Park Geun-hye, then South Korea's president, for a corporate deal. Park was eventually impeached and ousted. Lee was sentenced in August to five years in prison; an appeal is underway.
Samsung's dominance in many of the fastest-growing areas in tech have kept it afloat despite all that - and despite last year's disastrous recall of the company's fire-prone Galaxy Note 7 phone.
No company, including Apple, sells more smartphones than Samsung. But Samsung also makes many of the chips and display panels that go into its rivals' devices. And its chips power the data centers and servers that are in high demand thanks to the rapid expansion of cloud computing and services powered by artificial intelligence.
"Samsung's position is really unique globally. They're basically intertwined with everything," said Keon Han, an analyst with Credit Suisse in Seoul, South Korea.
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