It is urgent to restore Samsung Electronics Co.’s competitiveness in the semiconductor business, the chip division’s new head said in his first official message to the employees since his inauguration in May.
“The DS (Device Solutions) division is faced with an urgent task of restoring its fundamental competitiveness,” Samsung Vice Chairman Jun Young-hyun in charge of the DS division wrote in an internal message to the employees on Thursday.
Jun delivered the message a day after the South Korean chip giant’s triumphant return with the stellar performance of the DS business, which oversees the company’s semiconductor business.
On Wednesday, Samsung reported 10.4 trillion won ($7.7 billion) in operating profit for the April-June period, largely driven by the DS division’s 6.5 trillion won operating profit for the quarter on sales of 28.5 trillion won.
Over the first half, Samsung’s chip business raked in 8.4 trillion won in profit in a sharp turnaround from its nearly 15 trillion won in loss through 2023.
Jun, however, warned of a vicious cycle of dipping into the red again after the end of a super chip cycle without fundamental change.
Samsung’s DS head Jun Young-hyun
NEED TO ENHANCE COMMUNICATION
“The improvement in the second-quarter earnings was largely owed to the recovery in the overall chip market, not by the recovery of our competitiveness,” said Jun. “Without the restoration of fundamental competitiveness, we will be trapped again in a vicious cycle of repeating last year’s (poor performance).”
As part of rebuilding the competitiveness of Samsung’s chip business, the chief suggested enhancing communication among departments and team members, facilitating open discussion inside the organization, opening up problems, as well as making decisions and executing them based on data.
“We have to remove communication barriers to facilitate communication among leaders and teams,” said Jun.
Jun was appointed to lead Samsung’s DS division in a rare mid-year executive reshuffle in May, replacing Kyung Kye-hyun who had led the DS division since 2022 as president. Kyung was said to offer to step down.
Before moving to the DS division, Jun led Samsung’s future business planning unit as vice president.
Samsung’s HBM3E chip
Jun, 64, is a veteran chip executive who has worked in Samsung Electronics’ DRAM and NAND flash memory development and strategic marketing divisions since 2000.
Since he took the helm of the chip business with a vow to overtake crosstown rival SK Hynix Inc., Samsung launched dedicated high-bandwidth memory (HBM) and advanced chip packaging teams in early July.
SK Hynix, the world’s second-largest memory maker behind Samsung, is now the HBM segment leader.
Samsung has lost ground to SK Hynix in HBM technology.
The world’s top memory maker pledged to triple its HBM output this year.
It also hinted on Wednesday that its fifth-generation HBM, or HBM3E, would pass quality testing currently underway by Nvidia Corp., the world’s top AI chip designer, in the second half of this year.
By Eui-Myung Park
uimyung@hankyung.com
Sookyung Seo edited this article.
