Samsung Electronics Vice Chairman Kwon Oh-hyun

Kwon promoted to vice chairman to boost tech giant’s component side

By Kim Yoo-chul

Samsung Group conducted a larger-than-expected reshuffle, resulting in two promotions to vice chairman and six to president.

The highlight of the year-end shakeup was the introduction of a “top-two” system at its flagship Samsung Electronics. Kwon Oh-

Samsung Electronics Vice Chairman Choi Gee-sung

hyun, is one new vice chairman, in charge of component production, to work with existing Vice Chairman Choi Gee-sung, who oversees finished products.

``Samsung Electronics has restored a ` top-two’ management system,’’ said company communications chief Rhee In-yong in a briefing, Wednesday.

However, Kwon’s promotion doesn’t mean any change in task as he will carry on taking care of such businesses as liquid crystal displays (LCDs) and computer memory chips but with more authority.

Choi also sees no change in his role dealing with smartphones, TVs and other finished products. However, he will maintain his chief executive position but no decision has been made on whether to give Kwon the same authority. ``We’ve yet to decide,’’ Rhee said.

Samsung is the world’s biggest maker of memory chips, LCDs used in all digital gadgets, and it is also the top global manufacturer of smartphones and televisions.

There is much speculation as to the purpose of Kwon’s promotion.

Some say that it aims to boost Samsung Electronics’ current structure that makes it both a maker of components and a consumer of its own products.

Samsung has concluded that this dual position will help maintain robust growth in a time when the economy is slumping and it is fighting a patent war with Apple.

Kwon’s promotion will put the component and finished product sides on an equal footing, which will not just increase their collaboration but hopefully incite competition that may be dwindling among affiliates.

Some see Kwon’s promotion aimed at easing concerns by Apple and other users.

Apple feels uneasy as there were rumors that Samsung Electronics is sharing classified information within the company.

With both the component and finished product sides under Choi’s charge, it was felt that Apple’s order specifications would be handed over to Samsung’s mobile division.

``Samsung hopes the promotion of Kwon wipes out such worries. We should care for our clients with a better system. Samsung Electronics is planning to keep a `two-track’ strategy in patent disputes and set businesses by giving more power to the newly-promoted vice chairman Kwon,’’ said one company executive, who is directly involved with the matter, on the condition of anonymity.

Samsung supplies its chips and LCDs to major technology firms including Apple, Dell, Hewlett-Packard and leading Taiwanese PC makers.

Samsung provides its advanced mobile application processors produced from its non-memory chip plant in Texas for Apple’s iPhones.

It also announced a plan to construct its first memory chip-producing plant in China by creating a joint venture with a Chinese firm to effectively meet the rising chip demand from top-tier Chinese PC makers.

No agreement with Apple

Samsung Electronics doesn’t have any imminent plans for a peace treaty with Apple though leaked court documents say that Apple offered Samsung licensing agreements in the lead up to litigation, nearly six months ago in November last year.

The Samsung executives contacted by The Korea Times revealed that the firm’s top management was upbeat about the recent two straight victories against Apple in Australia and the United States, cutting the possibility that Samsung will go to the negotiating table with Apple for licensing immediately.

Samsung is still waiting for a court ruling in Paris, France. The company is seeking a complete sales ban on Apple’s latest iPhone, the iPhone 4S.

``No agreements with Apple this year and Samsung will keep continue the ongoing fight throughout next year,’’ said Samsung mobile chief Shin Jong-kyun.

``I can confirm that Samsung is not negotiating with Apple. Our hard-line stance hasn’t changed,’’ he said. Shin will stay in his current role after significantly helping Samsung become the world’s biggest smartphone maker after beating its rival and corporate friend Apple.

Meanwhile, Choi earlier said that it will ramp up its defense against Apple next year. He confirmed the creation of a $200 million war chest that the South Korea-based firm will use to fight Apple’s patent-related advances.

``Samsung is growing and it’s implementing ideal systems to handle and manage its key businesses, effectively. But for Samsung’s rivals, that’s a threat in a real sense,’’ said a fund manager from a Europe-based investment bank in Seoul by telephone.

Meanwhile, former Samsung LCD chief Chang Won-kie, who stepped back to an advisory role in July this year, has been given a second-chance as he was named president of Samsung China.

`` Samsung needs Chang as he is the right person to boost the firm's brand power in China,’’ Rhee said. It is building a cutting-edge LCD plant, there, as well.

Jung Yeon-joo, chief executive of trading company Samsung C&T, was promoted to vice chairman.

Kim Bong-yung, previously a senior executive vice president at Samsung SDS, was promoted to president and appointed as the chief executive of Samsung Everland, the group’s de facto holding company, Samsung said in a statement.