Samsung Names Jay Y Lee Executive Chairman Amid Global Economic Downturn

Samsung Electronics has named Jay Lee Lee as executive chairman of the world's largest smartphone and memory chip maker, two months after the heir apparent received a presidential pardon that cleared the 54-year-old's criminal record .

Lee was paroled last year after serving 18 months in prison for bribing former South Korean President Park Geun-hye. The parole prohibited Li from working for five years and prohibited him from traveling abroad. In August, Lee received a special presidential pardon that allowed him to formally participate in management, restore his right to work at Samsung, and accelerate decision-making on key strategies, from chip production to development plans. 'investment.

Lee, who has served as vice chairman of Samsung since 2012, would lead the tech giant after his father Kun Hee Lee, the former chairman of Samsung Group, passed away in 2020.

The long-awaited appointment comes amid falling global demand for chips and smartphones and market uncertainty due to the economic downturn. "The board cited the current uncertain global business environment and the urgent need to enhance corporate accountability and stability when approving the recommendation," Samsung said in a statement.

South Korea's biggest memory chipmaker said today that its third-quarter operating profit fell 31.39% year-on-year to 10.85 trillion won ($7.7 billion). ). Profits in the memory chip segment fell to 5.12 billion from 10.07 billion a year earlier due to weak demand for consumer products, cellphones and televisions, the company said. This is Samsung's first year-over-year profit decline since 2019.

In the three months ending September, Samsung posted sales of 76.78 trillion won (~$54 billion), up 3.79% from the same quarter last year.

The company expects demand for electronics and integrated circuits to recover somewhat in 2023, although macroeconomic uncertainty is expected to persist. “In the RAM business, after a weak first half, demand is expected to recover with a focus on servers as data center installations recover,” the company said in a statement.

The incredible breakthrough comes nearly three weeks after the Biden administration announced new rules aimed at blocking China's access to the latest chips. The restrictions prohibit the export of certain semiconductors and the sale of advanced manufacturing equipment to Chinese chipmakers.

The world's leading semiconductor makers including Samsung Electronics, TSMC and SK Hynix have been granted a one-year license to use US technology to sell advanced semiconductor chips for supercomputers and artificial intelligence to enterprises Chinese. SK Hynix, which competes with Samsung in the memory chip business, said on Wednesday it plans to cut capital expenditure by more than 50% in 2023 after reporting a 60% drop in third-quarter profit. .

Samsung sells NAND and DRAM chips used in laptops, smartphones and data storage. Earlier this month, the tech giant announced plans to triple production of advanced chips for high-performance computing, artificial intelligence, 5G and 6G telecommunications and the automotive industry. Samsung plans to start production of 2nm chips by 2025 and 1.4nm chips by 2027.

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