Samsung Electronics Co Ltd said on Tuesday that it will merge its mobile and consumer electronics divisions, naming new co-chief executives in the largest reshuffle since 2017 to simplify its structure and focus on the logic chip business.
Instead of three co-CEOs, the South Korean firm will be led by two co-CEOs as it pivots on the two business pillars of chips and consumer devices, including smartphones, to help lead the next phase of growth and boost competitiveness.
Samsung, whose Galaxy flagship brand helped it become the world’s largest smartphone maker by volume, is attempting to resurrect slowing mobile growth, which contributed 21 percent of profit last quarter, down from nearly 70 percent at its peak in the early 2010s.
Instead, its component business, led by chips, has become the most profitable, aided by a surge in data storage and a recent global semiconductor supply shortage.
Last quarter, the business generated nearly three-quarters of Samsung’s operating profit of 15.8 trillion won ($13.4 billion).
Han Jong-hee, the head of the visual display business, will become a co-CEO, leading the newly merged division spanning mobile and consumer electronics while also continuing to lead the television business, according to Samsung.
Han rose through the ranks of Samsung’s visual display business despite having no prior experience in mobile.
It is unclear what changes or divisions of labor are expected under Han, but analysts believe the reshuffle will help Samsung address challenges such as offering seamlessly connected services between its smartphones and home appliances.
“The biggest challenge in the long run is forming a platform of Samsung’s own,” said Lee Jae-yun, an analyst at Yuanta Securities Korea.
“Those businesses must continue to increase connectivity between devices, but they have yet to create a long-lasting platform with presence.”
More immediate issues include a chip supply shortage, rising raw material prices, logistics challenges, and competition from Apple Inc (AAPL.O) and Chinese rivals amid concerns about a slowing mobile market, according to analysts.