In the context of the declining semiconductor market and smartphones, the Korean tech giant once again faces risks related to product quality and ownership (related to the deployment of rights). inheritance of Vice President Lee).
Vice President Lee is having many difficulties since taking over Samsung
Samsung Electronics believes that the current situation is a new crisis and is actively seeking measures to address a wide range of major challenges.
Samsung's sense of urgency is expressed in part by the recent comment of Lee Jae-yong – Vice President and successor of the Group. On Saturday, Lee appeared in the lobby of Samsung Semiconductor Headquarters, in Hwaseong, Gyeonggi Province, to discuss the company's investment and employment plans with high-level management focused. Best for chip manufacturing department.
According to Samsung, during the four-hour meeting, the vice president emphasized: "Samsung should not be satisfied or disappointed with short-term results and opportunities; and what we should not give up in the context of fast-changing environments is the permanence and capacity of basic technologies. ".
Later, Lee called on the company's senior management to implement a plan to invest 180 trillion won ($ 153 billion) and hire 40,000 employees in three years (and the plan will not be changed for any what reason).
This is the first time Lee has held such a meeting since he led the Group to replace his father – President Lee Kun-hee, who was hospitalized in May 2014.
This is also the strongest directive of Samsung Vice President so far and it shows the difficulties that Samsung is facing is serious. An unnamed Samsung official said the company considered it a "new crisis".
Samsung is currently facing numerous challenges both at home and abroad.
The global memory chip market has entered a cycle of decline with low product prices and delayed contracts that have led to Samsung's semiconductor business being forecast to reduce profits throughout 2019. Operating profit In the first quarter of the company fell 60% compared to the same period last year, down to 6.23 trillion won. This is the lowest profit level in the last 10 quarters of this business.
The increasing instability in the global business environment, including ongoing trade conflicts between the United States and China, is also a major concern for Samsung. China's Huawei is both a rival and a business partner of Samsung.
Lee asked former US President George W. Bush for advice on global trade issues during his visit to South Korea last month.
The latest incident with Samsung Galaxy Fold is another challenge and creates additional pressure on the technology giant in the context of the high-end smartphone market is stagnant.
Samsung's folding screen smartphone was launched for the first time in February of this year, but some American reviewers discovered the error during the test. This makes the sale of products in April delayed and currently the new plan for the product has not been disclosed by Samsung.
In addition to business challenges, Samsung once again faces ownership risks associated with preparing for the succession of Vice President.
Samsung Lee's heir is facing charges from prosecutors about his role in the unfair merger between Samsung C & T and Cheil Industries in 2015, as well as accounting fraud at Samsung BioLogics. for the first public offering in 2016. Both incidents were seen as part of the illegal process of transferring control of the Group from President Lee to his son.
An unnamed official said: "Lee stressed that Samsung once again went through a difficult time. Samsung's employees said that the atmosphere at the company was pretty bad, just like when Lee was imprisoned (in 2017) due to the scandal. Highway of the president ".