Samsung Electronics has made a sudden change in the leadership of its semiconductor business. The move is seen as a personnel overhaul to overcome the complex crisis facing its semiconductor operations.
On May 21, Samsung Electronics announced the appointment of Jeon Young-hyun, the head of the Future Business Planning Group (Vice Chairman), as the new leader of the Device Solutions (DS) Division. Kyung Ky-hyun, the previous head of the DS Division, has moved to the position of head of the Future Business Planning Group.
The reason behind Samsung’s “one-point” surprise announcement, coming about six months ahead of its regular personnel changes, is due to an internal crisis surrounding semiconductors. Considering the overall downturn in the industry, last year’s semiconductor operations alone saw a massive loss of 15 trillion won, compounded by a misjudgment in timing investments in High Bandwidth Memory (HBM) for artificial intelligence, which led to competitors taking the lead, necessitating a renewal of its technology gap strategy.
Indeed, SK hynix, which has traditionally been the perennial runner-up in the memory market, is vigorously pursuing Samsung Electronics with its advancements in High Bandwidth Memory (HBM), and in the foundry (semiconductor contract manufacturing) sector, Intel has thrown down the gauntlet to Samsung. The positions Samsung must defend, being number one in memory and number two in foundries, are now under threat. Moreover, TSMC, the overwhelming leader in the foundry market, has declared that it will start producing “base die,” a key component of HBM, further signaling that Samsung is being cornered.
Currently, SK hynix is the exclusive supplier of the third generation HBM (HBM3) to Nvidia, the world’s largest graphics processing unit (GPU) company, dominating over 90% of the HBM3 market. Although Samsung Electronics has belatedly entered the HBM3 market, it failed to pass Nvidia’s quality tests. SK hynix has also successfully delivered the fifth generation HBM (HBM3E) to Nvidia before Samsung, making it imperative for Samsung Electronics to close the gap in the HBM market share with SK hynix.
In the foundry business, narrowing the gap with industry leader Taiwan’s TSMC is critical. Intel, which has publicly set a goal to surpass Samsung Electronics by 2030, is another challenger that Samsung must fend off. According to market research firm TrendForce, TSMC’s market share in the global foundry market reached 61.2% in the fourth quarter of last year, compared to Samsung Electronics’ 11.3%, widening the gap to 49.9 percentage points. Samsung Electronics, which was the first in the world to develop sub-3-nanometer ultra-fine process technology, is counting on Vice Chairman Jeon to personally oversee the development and mass production processes as a key move in its pursuit.
Vice Chairman Jeon, tasked with the special mission of reviving Samsung’s semiconductor business, is an engineer by training and a key figure who has contributed to Samsung’s memory success. Having started at LG Semicon, the predecessor of SK hynix, in 2000 before joining Samsung Electronics, he has extensive experience in the development and marketing of DRAM and NAND flash, and rose to the position of business head of the memory division. He later served as president and chairman of the board at Samsung SDI, leading the battery business, before returning to Samsung Electronics last year to oversee the Future Business Planning Group.
