Samsung Electronics announced that Kwon Oh-hyun, CEO and Vice Chairman of the South Korean electronics company, plans to resign from his managerial position. This step would create and escalate a vacuum in leadership especially after Jay Y. Lee, the de facto head, was convicted of bribery and subsequently jailed.
The resignation of the Samsung leader came as a shock as he was expected to assume a greater role in the organisation following the departure of a few notable Executives and the arrest of Lee. His resignation came about on the same day when the Company’s third-quarter operating profit was forecast, and Kwon was majorly instrumental in it.
Kwon, who is 64 years old, is viewed as Samsung Group No. 2. Apart from being a board director and chairman of the board, Kwon successfully leads the display business as well as the component business—involving memory chips.
In a statement, Kwon Oh-hyun—also known as “Mr Chip”—expressed that the time had come to start afresh and anew, with young leadership and new spirit. He also added that they were not able to read future trends right now and it was difficult to find new growth engines.
The world’s largest manufacturer of TVs, smartphones and memory chips is ready to smash its profit record this year. This amazing feat can be owed to the overwhelming demand for memory chips. In the three months involving June, Samsung’s top earner was semiconductors, which made a whopping 8 trillion won ($7.20 billion).
Japan’s Toshiba Corp has decided to partner with home competitor SK Hynix; this adds to the major shift being undergone by the global chip industry. Moreover, other firms are collaborating too in an attempt to promote areas like automobiles and artificial intelligence.
Right after hitting an all-time high, Samsung shares—which are valued at $350 billion—dropped 0.6 percent. Kwon served the South Korean company for a good period of 32 years, and he was in the top job for the last five years. His unexpected departure comes at a time when the company is experiencing uncertainty in leadership.
Samsung Electronics needs to think of substitutes for several major roles with Kwon’s departure. Even, Choi Gee-sung (Jay Lee’s mentor) quit and was also an accuse in the bribery scandal.
According to people who are acquainted with the matter, even though Samsung Group is the leading conglomerate in South Korea with ventures spanning hotels to smartphones, it has had no major contingency plan following Lee’s conviction and arrest.
According to Chung Sun-sup, Chief Executive of research firm Chaebul.com, the leadership vacuum and changes could serve as an opportunity for a new generation to rise.