Samsung Electronics' CEO resigns - even as company predicts surge in profit

14 October, 2017, 00:51 | Author: Becky Perry
  • Samsung Electronics' Galaxy Note 8 are seen on display at its store in Seoul South Korea

Kwon Oh-hyun announced his decision to step down on Friday, when the company estimated that its quarterly profits from July to September will reach a record high of 14.5 trillion won (9.6bn).

Kwon joined Samsung in 1985 as a researcher in the company's Semiconductor Research Institute in the United States.

In August, the group's heir apparent Lee Jae-yong was convicted of bribery and corruption and sentenced to five years in jail. He later served as head of the division producing system semiconductors and then as head of the semiconductor business before becoming CEO of the company in 2012.

He will also be briefed that his top lieutenant and chief executive of Samsung Electronics, Kwon Oh-hyun, has chose to step down to make way for a new leader.

Analysts said Samsung's chip business may have posted an operating profit of 10 trillion won in the third quarter, along with sales of 20 trillion won, putting the operating margin at above 50 per cent. Analysts forecast Samsung's 2017 net income almost doubled from 2016 and they expect Samsung to outdo its annual financial results for the next few years, thanks to its position as the world's largest maker of the semiconductor group known as memory chips that are used for mobile devices and computer servers.

The CEO added that Samsung Electronics is facing a grave situation despite it making record-breaking earnings.

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But despite the problems at the top, Samsung's accounts were still looking rosy after the company said rocketing prices for memory chips would lead to a record quarterly profit.

Meanwhile sales are expected to have risen nearly 30% from a year ago to 62tr won, or $55bn, for the quarter. At first Samsung announce very positive Q3 earnings.

While Lee is unable to do much to minimise a leadership vacuum at one of the world's biggest technology firms, the 49-year-old Samsung scion will get some solace that Samsung is chugging along without him.

The company has a league of executives who manage day-to-day operations, but has usually relied on the leadership and the visions of founding family members for direction.

Kwon is now both a member of the Samsung Board of Directors and Chairman of the Board. The younger Lee has sought to fill his father's place as the company's since Lee Kun-hee was hospitalized in 2014. Jay Lee, was accused of passing on large payments to the foundations run by South Korea's former president, Park Geun-hye.

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