Samsung boss Jay Y. Lee to construct on late father’s legacy By Reuters

By Joyce Lee

SEOUL (Reuters) – As Samsung Electronics (OTC:)’ de facto chief Jay Y. Lee steps up as chairman, daunting duties await the manager looking for to construct on the work of his father, who turned a copycat equipment maker into the world’s largest chip and smartphone producer.

Samsung (KS:) stated on Thursday its board of administrators appointed Lee as govt chairman, a symbolic transfer confirming that South Korea’s most beneficial firm shall be formally run by the third technology of its founding household.

The appointment follows his launch from jail final yr for bribery convictions, of which he has since been pardoned, permitting him to formally assume the management function he has held since his father, the late patriarch and Samsung Group chairman Lee Kun-hee, was hospitalised in 2014. The elder Lee died in 2020.

Lee, 54, has been vice chairman of Samsung Electronics, the crown jewel of South Korea’s largest enterprise conglomerate, since 2012.

“As I mirror on his (Lee senior) life…I’m stuffed with a deep sense of duty to protect his legacy, and to construct on it – for our future,” Lee stated in a memo shared with Samsung staff on Thursday.

“Indisputably, we’re at a pivotal second…Now’s the time to plan our subsequent transfer. Now’s the time to behave, to be daring and unwavering in our focus.”

Samsung, a $280 billion international tech big, faces mounting enterprise headwinds amid a pointy downturn in international tech demand, brought on by hovering inflation, rates of interest and a dark financial outlook.

Samsung reported a 31% drop in third-quarter revenue on Thursday and stated geopolitical uncertainties have been prone to dampen demand till early 2023.

Kyungmook Lee, professor at Graduate Faculty of Enterprise, Seoul Nationwide College, stated the brand new chairman must concentrate on companies with the best progress potential reminiscent of contract chip manufacturing, and new areas reminiscent of synthetic intelligence.

“Additionally, Samsung continues to be somewhat top-down,” stated Kyungmook Lee, who co-authored ‘The Samsung Method’. “He faces the duty of adjusting the company tradition to suit the present occasions.”

The foundations of Samsung’s present international prime place in reminiscence chips, smartphones and televisions have been established throughout the late Lee’s period.

Semiconductors stay its largest money cow, however enterprise situations have grow to be rather more advanced amid U.S. efforts to sluggish China’s advance in chip expertise.

That could be a main enterprise danger for Samsung, which counts each China and the US as main markets.

Lee is prioritising progress in Samsung’s foundry enterprise and seeking to construct contract chip manufacturing as a serious income stream and dethrone Taiwan’s TSMC from the highest place in logic chips by 2030.

However the plan is off to a tough begin, with low manufacturing yields in its new course of inviting complaints from some purchasers lately.

Samsung can also be seeking to increase its biopharmaceuticals and 5G community gear companies.

OUT OF JAIL

Since becoming a member of Samsung greater than three a long time in the past in 1991, Lee has held numerous senior roles, together with chief working officer and vice chairman, and overseen key companies reminiscent of a now dissolved flat-screen three way partnership with Sony (NYSE:) Group Corp.

Critics declare Lee does not have expertise, lacks his father’s charisma and hasn’t made a serious mark that may be counted in his achievements.

“Till now, Lee hasn’t actually proven his personal administration fashion,” stated Park Ju-gun, head of study agency Leaders Index.

However Samsung insiders say his quiet, urbane method disguises a steely dedication Lee will want if he’s to develop Samsung.

Lee has typically shunned the limelight, with no official Twitter or Fb (NASDAQ:) accounts and little recognized of him outdoors the corporate, apart from a divorce in 2009.

Lee has a level in East Asian Historical past from Seoul Nationwide College and an MBA from Japan’s Keio College.

As an solely son, Lee was groomed by his father to take over the core enterprise of Samsung Group, which his grandfather based in 1938. However authorized troubles lately pressured him to step again from frontline administration.

From late 2016, he was dogged by a bribery trial and conviction, which led to 18 months in jail. He was parolled final yr and finally pardoned in August, permitting him higher freedom in his administration function.

Whereas Lee has shaken most of his authorized woes, an ongoing trial over fraud and inventory manipulation fees hangs over him.

“My shoulders have grow to be very heavy,” he instructed reporters as he left a courtroom listening to on Thursday. “I’ll create an organization that’s trusted and liked by the folks a bit extra.”

That did little to cheer traders with Samsung shares underperforming a 1.5% rise within the benchmark index. Shares in development affiliate Samsung C&T, wherein Lee owns a 18% stake, rose as a lot as 7.1%.