Samsung CEO Steps Down Despite Record Profits, Warns Of "Unprecedented Crisis"

In a surprise move - and just months after the grandson of the company’s founder was jailed for corruption - the CEO of Samsung, Kwon Oh-hyun has resigned 'to make way for new leadership'. In an odd turn of events, despite record profits, Kwon warned the company faces an "unprecedented crisis."

Kwon had emerged as the public face of Samsung Electronics after Jay Y. Lee, grandson of the company’s founder, was detained on corruption charges and then sentenced to five years in prison in August amid a scandal that brought down South Korea’s president.

The share price slipped on the news...

As Bloomberg reports, Kwon Oh-hyun, who also serves as co-vice chairman, announced his retirement on Friday as the Suwon-based company reported record operating income of 14.5 trillion won ($12.8 billion) on booming demand for displays and memory chips.

He said the company faces an “unprecedented crisis” despite the financial success.

“As we are confronted with unprecedented crisis inside out, I believe that time has now come for the company start anew, with a new spirit and young leadership to better respond to challenges arising from the rapidly changing IT industry,” Kwon said in the statement.

While the latest financial results show Samsung’s business units operating smoothly, that in itself may present risks for Kwon, said Park Ju-gun, who tracks corporate executives at CEOScore.

“Nobody wants to be the chief of Samsung Electronics at a time like this; it’s too risky,” said Park.

 

“It puts that person at odds with the controlling family. Only when he is in the shadow is he playing his role properly.”

Despite the trial, the company’s business has remained robust, helped by strong demand for memory chips.

“It’s the chip prices that are driving up the profit rather than the sales volumes,” said Park Kang-ho, an analyst at Daishin Securities. “We’re expecting an operating profit of about 16 trillion won in the next quarter.”

Comments

Swamp Yankee Fri, 10/13/2017 - 07:28 Permalink

Holy cow!  Doom!  Not just any doom mind ye; this is seriously deep kim-chee DooM! Some meaningful deatils on 'why' would have been nice, just sayin....This sounds more like a vanila changing of the guard. Pass the salt please.

techpriest CatsPaw Fri, 10/13/2017 - 10:21 Permalink

Most people have debt because they think a new X is a "need" that they "deserve," as opposed to a luxury that they want but should hold off on buying.

The true cost of survival is actually pretty low, esp. if you are creative. If you don't care about looking poor 3-6 years you can build up tremendous amounts of cash, and not worry much about debt again.

In reply to by CatsPaw

Ban KKiller Fri, 10/13/2017 - 07:36 Permalink

No growth in the charts, all teeveed out. He knows the past growth was falsely based on bank debt bring bought by central banks not people. Ha ha ha ha.

Luc X. Ifer Ban KKiller Fri, 10/13/2017 - 11:50 Permalink

Also, not much left to improve in the mobile computing space - the bread & butter of Samsung's growth, especially with the rise of open hardware/software for mobile. Tech disruption has short life span before becoming commodity. The big & fast money where made the last generation and current due to tech disruption, everybody is scanning around for the next viable high tech disrupting thing which will allow the same. AI/ML or the Blockchain most likely but these are niche dedicated software and with a very limited market/buyers number - not hardware toys to be sold in huge quantities to the street level loser user.

In reply to by Ban KKiller

Greenspazm Fri, 10/13/2017 - 07:56 Permalink

Top cell model S8 plus costs $650 in USSA and 740€ in EUBut for what? A fancy super-elongated rounded screen that doesn't snag against your scrotum when carried in your left pants pocket? Fingerprint scanner? Half-baked "Bixby assistant"?

a Smudge by an… Pesky Varmint Fri, 10/13/2017 - 11:29 Permalink

The process of shopping for a phone involves accepting that they are all infernal devices that are apt to do more harm than good. That by accepting one of these devices, you in some way enslave yourself to a culture of utter depravity, narcissism and destruction.

By generally going with whatever Samsung was popular 2 years ago (and generally for $50 no matter what you paid for it, talk about a depreciating asset), you stay one step behind the filth and corruption so prevalent. This is basically using humanity as a test bed. You guys work out the bugs. You guys suffer the pathology (myopia, faper's elbow, total lack of situational awareness) so I know what to avoid.

Put another way, every time one of you roasts to death inside a burning Tesla puts me one step closer to a $50 Tesla.

In reply to by Pesky Varmint

Bai Suzhen Fri, 10/13/2017 - 08:26 Permalink

I mean, really...  How many fucking HD flat screen TVs can they sell?  Hell, even the looters don't need any more, and Wally World is practically giving them away.  The new Galaxy phones are no better than the old ones, so what's the reason to upgrade?  Ane who needs a five thousand dollar refrigerator that's connected to the Internet?  But the real reason probably has something to do with staying out of jail for some reason or other.