Samsung CEO Resigns as Tech Giant Forecasts Record Profits

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In a surprise move, Samsung announced on Friday that its CEO and vice chairman Kwon Oh-hyun is to step down. Kwon was expected to take a bigger role at the company after de facto leader J Y Lee was arrested and jailed for bribery, but his surprise resignation has deepened concerns of a power vacuum.

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"It is something I had been thinking long and hard about for quite some time. It has not been an easy decision, but I feel I can no longer put it off," Kwon said in a letter sent to employees. "As we are confronted with unprecedented crisis inside out, I believe that time has now come for the company to start anew, with a new spirit and young leadership to better respond to challenges arising from the rapidly changing IT industry."

The news came on the same day that Samsung forecast record third-quarter operating profit thanks to its thriving memory chip business, which has allowed the South Korean tech giant to brush off a punishing period in 2016 in which the fire-prone Galaxy Note 7 recall made the biggest tech headlines.

Semiconductors were Samsung's top earner in the three months through June, making a record 8 trillion won ($7.19 billion). While memory chips were responsible for most of Samsung's profits, its mobile phone business was given a boost by its new Note 8 smartphone which received the company's highest number of pre-orders.

The timing of the announcement and Kwon's references to an "unprecedented crisis" suggest that Samsung is gearing up for major changes to its operational structure and internal culture following Lee's corruption scandal, but the move also increases uncertainty as to who will fill the gap that Kwon leaves.

Kwon has essentially functioned as the number two in Samsung Group, being not only the chairman of the board and a board director, but also head of the components business and Samsung Display. Also known as "Mr Chip", Kwon was instrumental in making Samsung's semiconductor business a global leader.

"We are fortunately making record earnings right now, but this is the fruit of past decisions and investments," continued Kwon in the letter. "We are not able to even get close to finding new growth engines by reading future trends right now."

Kwon said he will see out his term as chairman of the board and board director until March 2018, and will remain in his two other roles during the same period.

Tag: Samsung

Top Rated Comments

maflynn Avatar
43 months ago

Because..?

This is why:

Multiple Korean politicians and Samsung upper management were found illegally taking bribes and collusion. They are in jail.

They were caught with their hands in the cookie jar so to speak. With record profits, I'm not sure why someone would be so quick to resign. There's definitely more to the story that is not being told.
Score: 11 Votes (Like | Disagree)
Scottsoapbox Avatar
43 months ago
Now we can also enjoy forum posts about how Kwon Oh-hyun would have never let this happen. :cool:
Score: 11 Votes (Like | Disagree)
Ntombi Avatar
43 months ago

No growth, riiight.

2nd largest global hip company.
Huge upstairs on servers and VM with onboard VNAND SSD’s,
Larger and faster requests for RAM chips,
Cars, friedges, home voice activated devices (echo Alexa etc), debuting,
More entrants into space exploration satellites etc!

And you think there is NO growth?! Riiight

Did you even read the OP, or did you jump right to the comments?

[USER=764769]@Appl3FTW[/USER] didn’t make it up, this is straight from Kwon’s resignation letter:

"We are fortunately making record earnings right now, but this is the fruit of past decisions and investments," continued Kwon in the letter. "We are not able to even get close to finding new growth engines by reading future trends right now."
Score: 6 Votes (Like | Disagree)
cljmac Avatar
43 months ago
Multiple Korean politicians and Samsung upper management were found illegally taking bribes and collusion. They are in jail.
Score: 4 Votes (Like | Disagree)
Kaibelf Avatar
43 months ago

Because..?

Because they engaged in a bribery scandal which saw the heir to the company sentenced to five years in prison AND brought down the President of South Korea? Not to mention perjury about the secret deals they cut with the political class in SK to give them advantages directly through the nation's government to enrich their company and the owners. Certainly that's enough for you?
[doublepost=1507904271][/doublepost]

If I'm not mistaken Samsung makes the best displays and also provides components to many iPhone parts.

Clearly Apple likes them to a certain degree. So let's cut the fanboy crap.

I like diamonds. That doesn't mean I think blood diamonds are okay.
Score: 3 Votes (Like | Disagree)
DeepIn2U Avatar
43 months ago

If you read between the lines... he’s bailing out because he sees no growth in Samsung and they are going to be stagnant or behind in the future. He said the benefits they’re enjoying right now we’re from the previous investments. He sees nothing and they’re not doing anything right now for the next phase. Bahaha Samsung will fall.

No growth, riiight.

2nd largest global hip company.
Huge upstairs on servers and VM with onboard VNAND SSD’s,
Larger and faster requests for RAM chips,
Cars, friedges, home voice activated devices (echo Alexa etc), debuting,
More entrants into space exploration satellites etc!

And you think there is NO growth?! Riiight
Score: 3 Votes (Like | Disagree)

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