Shulou(Shulou.com)11/24 Report--

According to reports on the evening of October 28, Beijing time, after years of training, "Samsung Crown Prince" Lee Jae-yong was finally appointed president of Samsung Electronics on Thursday, inheriting the vacancy left by his father, Lee Kun-hee, who died in 2020, thus reaching the pinnacle of the power of the tech giant.

Lee Jae-yong, 54, has been the de facto leader before as vice president of Samsung Electronics. But now, as the indisputable No. 1 figure in Samsung Electronics, Lee Jae-yong also has to take full responsibility of the company.

It is well known that Samsung Electronics is the most dominant company in South Korea, and together with the broader business covered by the entire Samsung Group, Samsung plays a vital role in South Korea, so that it is known as the "Republic of Samsung".

As a third-generation business tycoon, Mr Lee has little time in the spotlight as he faces challenges ranging from the collapse of the semiconductor industry to the latest legal disputes that haunt the company, while finding ways to fend off business challengers.

Overcome the downturn in the chip business

Amid rising inflation and a slowing economy, global semiconductor manufacturers are grappling with sluggish demand for their products, and Samsung is no exception. Samsung Electronics, the world's largest maker of memory chips, said on Thursday that third-quarter operating profit from its semiconductor division halved to 5.1 trillion won ($3.6 billion) from a year earlier.

But Samsung said it would not cut production of DRAM and NAND memory chips and expected demand to rebound in the medium to long term. But it also means that lower chip prices will continue to undermine the company's profits for at least the next few quarters.

In addition, Samsung must fend off challengers in other business areas, such as smartphones. Some mobile phone manufacturers have said they plan to overtake Samsung to become the world's largest smartphone maker (based on shipments) in the next few years.

Looking for new growth points

Currently, Samsung Electronics is looking for new areas of growth. Under Lee Jae-yong, Samsung Electronics has invested billions of dollars in biotechnology in recent years. Earlier this month, he also visited the fourth new factory opened by Samsung Biologics in Incheon, indicating that he is very interested in the business.

In the third quarter, Samsung Bio's operating profit doubled year-on-year to 3.2 trillion won, equivalent to 60 per cent of the operating profit of Samsung's chip division. At present, the business is growing rapidly, but it has not yet reached the same level as other Samsung technology businesses.

In addition, Samsung Electronics invests in the battery business of electric vehicles through its subsidiary Samsung SDI. Samsung's SDI operating profit rose 52 per cent in the third quarter from a year earlier, but its global market share was about 5 per cent, lagging behind market leaders such as Ningde era, LG Energy Solution and Panasonic.

Persistent legal problems

Like many South Korean conglomerates, Samsung has been plagued by legal problems for decades. Mr Lee, who had previously been jailed for a year and a half over bribery, was pardoned by the president earlier this year and welcomed by the South Korean business community.

In addition, Mr Lee faces another legal dispute after South Korean prosecutors accused him of stock market manipulation and accounting fraud in the 2015 merger of Cheil Industries and Samsung products.

The case is currently pending in a court in Seoul and is expected to be decided next year. Mr Lee's lawyer denied the prosecutor's charges in court, saying the deal was legal. Experts say that while the trial continues, Mr Lee's move to become the company's top leader could be a sign that he has confidence in the outcome.

Advocate the new "Samsung spirit"

Experts say Mr Lee needs to update the company's core values and build a new management team focused on quality, as his father did in the 1990s.

A former Samsung executive said Mr Lee had to show his unique vision. "he should show how he leads Samsung by proposing new spirits or values," the former executive said. "

In a letter to employees on Thursday, Mr Lee outlined the current challenges facing the company.

"there is no doubt that we are at a critical moment," he said. but for us, Samsung, this is nothing new. we have been facing obstacles and confronting them. now is the time to plan our next move, and now is the time to act boldly and unswervingly in our areas of focus. "

The globalization of financial business

Samsung also operates a range of financial businesses, from insurance to securities to asset management. But analysts say Samsung is only a player in South Korea's domestic market and lacks plans to go global.

According to court documents and testimony, Mr Lee considered selling Samsung Life Insurance to Warren Warren Buffett, but later decided to continue to operate.

Experts say Mr Lee should consider how to make the financial business grow rapidly and compete in the international market. At present, the company's financial business even lags behind local South Korean companies such as Mirae Asset.

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