Jeon Young-hyun warns DS leaders not to credit profits to tech edge
Samsung Electronics Vice Chairman Jeon Young-hyun
Jeon Young-hyun, Head of Samsung Electronics’ Device Solutions (DS) Division, which leads the company’s semiconductor business, has declared a fundamental structural improvement for the organization, putting aside the joy of recent performance improvements. This measure stems from a sober assessment that the recent turnaround to profitability was driven by external factors, such as rising memory prices, rather than technological superiority.
According to industry sources on May 15, Vice Chairman Jeon recently held a business status briefing for executives, strongly urging them not to become complacent with their achievements. Although Samsung Electronics’ DS Division posted an operating profit of 53.7 trillion won in the first quarter of this year, accounting for 94% of the company’s total profit, its leader did not see this as the completion of overcoming the crisis. He heightened the sense of urgency among executives by defining the current industry recovery period as the last chance to regain competitiveness.
Vice Chairman Jeon particularly presented a ‘client-first’ attitude, along with strengthening technological competitiveness, as a new management keyword. His analysis is that although competition among big tech companies to secure semiconductors is fierce due to the expansion of the artificial intelligence (AI) market, market leadership cannot be maintained without uncompromising product quality and a customer-centric mindset. He clarified that performance is ultimately a result created by customers and instructed that voices from the field be actively reflected in product development.
This message is drawing even more attention as it comes at a time when the National Samsung Electronics Union has announced a general strike for 18 days, from the upcoming 21st to the 7th of next month. With internal conflicts escalating, Vice Chairman Jeon emphasized the continuity of management activities and ordered executives to take the lead in ensuring production line operation and supply stability. This is interpreted as a move to preemptively block a situation where internal turmoil could lead to a decline in client trust.
The market is closely watching the potential economic impact if Samsung Electronics’ strike actually takes place. A comprehensive analysis from the financial sector and the industry projects that the damages from production disruptions due to the strike could range from a minimum of 20 trillion won to a maximum in the 40 trillion won range.
JPMorgan has presented a pessimistic scenario in which the annual operating profit could evaporate by over 40 trillion won due to the strike’s aftermath, and the union is also pressuring the company by forecasting losses in the tens of trillions of won. Given the nature of semiconductor manufacturing, where a single shutdown requires enormous time and cost to recover, Vice Chairman Jeon’s recent move is akin to making a last stand for risk management.
Jung Suk-yee
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