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Jay Y. Lee, Samsung’s chief executive, will continue to build on the legacy of his father By Stocksak


© Stocksak. FILE PHOTO: Jay Y. Lee (Vice Chairman of Samsung Electronics) speaks at a news conference held at a company office building in Seoul, South Korea on May 6, 2020. REUTERS/Kim Hong-Ji/Pool/File Photo

By Joyce Lee

SEOUL (Stocksak). Jay Y. Lee, Samsung Electronics’ de facto leader, assumes the role of chairman. He will be trying to build on the legacy of his father’s work, who transformed a copycat appliance manufacturer into the world’s largest chip and smartphone maker.

Samsung (KS.) announced on Thursday that its board appointed Lee as executive Chairman. This symbolic move confirms that South Korea’s most valuable company will now be run by the third generation.

The appointment comes after his release last year from jail for bribery charges. He has since been pardoned. In 2020, the elder Lee passed away.

Lee, 54 years old, is the vice chairman at Samsung Electronics, South Korea’s largest business conglomerate. He has held this position since 2012.

“As I reflect on his (Lee senior) life…I am filled with a deep sense of responsibility to preserve his legacy, and to build on it – for our future,” Lee said in a memo shared with Samsung employees on Thursday.

“Without any doubt, we are at an important moment…Now is a time to plan our next step.” Now is the time for action, to be bold, unwavering in your focus and to take control of the situation.

Samsung, a $280billion global tech giant, faces increasing business headwinds from a sharp downturn of global tech demand. This is due to soaring inflation and interest rates as well as a gloomy economic outlook.

Samsung reported a 31% decline in third quarter profit on Thursday. They also stated that geopolitical uncertainties would likely dampen demand until 2023.

Kyungmook, a professor at Seoul National University’s Graduate School of Business said that the new chairman must focus on businesses with high growth potential like contract chip manufacturing and new areas such artificial intelligence.

“Also Samsung is still quite top-down,” stated Kyungmook Lee who co-authored “The Samsung Way”. “He must adapt the corporate culture to the times.”

The late Lee’s era was the time when Samsung’s global top position in memory chips and smartphones, as well as televisions, was established.

Despite semiconductors remaining the country’s largest cash cow, business conditions have become more complicated as a result of U.S. efforts slowing China’s advancement in chip technology.

This is a major business risk to Samsung, which counts both China as major markets.

Lee is prioritizing growth in Samsung’s foundry and is looking to build contract chips manufacturing as a major revenue stream, and dethrone Taiwan’s TSMC from the top spot in logic chips by 2030.

The plan is not going as planned. Low production yields in the new process have led to complaints from clients over the years.

Samsung is also looking to expand its 5G network equipment and biopharmaceutical businesses.

OUT OF JAIL

Lee joined Samsung in 1991 more than 30 years ago. He has held several senior roles, including chief operating officers and vice chairman. He also managed key businesses like a now-defunct flat-screen joint venture. Sony (NYSE:) Group Corp.

Critics claim Lee lacks experience, charisma and has not made a significant contribution to his achievements.

Park Ju-gun, the head of Leaders Index, said that Lee has not yet shown his management style.

Samsung insiders believe that Lee’s quiet, urbane personality disguises a steely determination if he wants Samsung to grow.

Lee has largely avoided the limelight. He has no official Twitter or facebook (NASDAQ:) accounts. Little is known about him outside of the company, aside from a 2009 divorce.

Lee holds a degree from Seoul National University in East Asian History and an MBA from Japan’s Keio University.

Lee was the only son of his father and was encouraged by him to take over the core business at Samsung Group, which his grandfather established in 1938. In recent years, however, he was forced to step down from frontline management due to legal issues.

In late 2016, he was subject to a bribery case and was convicted. This resulted in 18 months in prison. He was finally pardoned last August and allowed to exercise greater control over his management role.

Lee has managed to resolve most of his legal problems, but he is still being tried on fraud and stock manipulation charges.

He said that his shoulders were very heavy as he left court on Thursday. “I will create an organization that is trusted and loved more by the people.”

Investors were disappointed as Samsung shares performed poorly against a 1.5% gain in the benchmark index. Shares in construction affiliate Samsung C&T, in which Lee owns a 18% stake, rose as much as 7.1%.

News Source and Credit

Stocksak Editorial

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