Business

Crisis? What crisis? Samsung is raking in $109m profit a day

Top brass reshuffled after heir locked up and CEO quits

By Andrew Orlowski

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Samsung announced new leadership this week following the resignation of CEO Kwon Oh-hyun, and the jailing of the empire's heir apparent.

The latter, Lee Jae-yong, had effectively run the chaebol for over two years. He is appealing his five-year sentence for corruption.

The company had already indicated third-quarter record profits of $12.81bn on revenue of $60bn two weeks ago. This week it fleshed out the numbers and announced new talent. Or, more accurately, old talent promoted.

Samsung has promised that the VC's chair will be kept warm for Lee Jae-young when he returns from prison, suitably chastened, and the existing three-CEO structure will remain intact.

Veteran Samsung co-CEOs J K Shin and Yoon Boo-keun will step down. CFO Lee Sang-hoon has been named board chairman. Semiconductor CEO Kim Ki-nam has been promoted to head of the entire components business, Koh Dong-jin is considered redeemed after the Note 7 debacle to take charge of mobile, and Kim Hyun-suk becomes head of consumer electronics.

Samsung's profit has increased threefold over three years, and it will throw back $25bn over the next three years to shareholders in the form of dividends and buybacks. Capex will be $41bn this year.

Just over 40 per cent of Samsung Electronics' revenue comes from mobile, but this is under pressure from Chinese manufacturers with lower costs and vast domestic home markets. Samsung overtook Intel as the world's biggest chipmaker this year, and over 20 per cent comes from semiconductors. That's a remarkable feat given that Intel earned some 40 per cent more in semiconductor revenue only 18 months ago. It's powered by the need for memory chips in almost anything. ®

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