Samsung engineers major shake up to fight recession

19 January 2009

Samsung Electronics' four businesses will now operate under two umbrellas: Device Solutions, which includes memory chips and LCDs; and Digital Communications, which will house the company's consumer appliances and mobile phones business.

The electronics company had previously operated separate divisions for chips, liquid crystal displays, cell phones, and consumer electronics.

The move comes as the company faces a slumping economy that's leading to decreased demand and prices for semiconductors and flat screens. Samsung's chips division has been dragging down the company, and for the third quarter of 2008 the company saw its net profits decline 44 per cent from the previous year.

The cell phone and digital media divisions have been gaining traction though, and both offer high profit margins for the company. The company is now the second-largest cell phone manufacturer behind Nokia, and its consumer electronics products are rapidly gaining market share.

Essentially the company is consolidating between money spinners and non profit making divisions.

Samsung Electronics is forecast to post a 2008 fourth-quarter operating loss of 400 billion won ($294.6 million) and 2009 first-quarter operating loss of 600 billion won ($441.8 million)

Management reshuffle
Current chief executive officer Lee Yoon-woo will assume the additional role of overseeing the combined semiconductor and liquid crystal display (LCD) units, two areas that face the biggest challenges in the ongoing industry slump.