Samsung Electronics’ sudden replacement of the head of its semiconductor business with Vice Chairman Jun Young-hyun on May 21 signals a heightened awareness of challenges within the company. This off-cycle personnel change, specifically targeting semiconductor leadership, reflects Samsung’s response to the threat posed by SK Hynix in the global memory semiconductor market. Following significant losses in the DS division last year, discussions about replacing its former head, Kyung Kye-hyun, arose but were postponed as the memory semiconductor market rebounded. However, continued delays in supplying Nvidia with the next-generation memory semiconductor, HBM, have reportedly increased internal concerns at Samsung. Discussions indicate that the ongoing delay in Nvidia’s HBM verification process, which is currently underway, was a decisive factor in the personnel change.
Samsung, renowned for its 30-year dominance in the memory sector, faces hurdles in the crucial HBM market pivotal for artificial intelligence (AI) semiconductors. After developing HBM in 2013, SK Hynix now dominates the market by supplying Nvidia exclusively with the fourth generation, HBM3, as Nvidia holds 90% of the AI semiconductor market. Commencing mass production of HBM3E as of March, SK Hynix continues to expand its supply to Nvidia.
Samsung initially succeeded with the second generation, HBM2, but faced criticism for falling behind after downsizing its HBM development team in 2019. Despite later establishing a dedicated HBM team, progress has been hindered by delays in Nvidia’s verification process. With Samsung now trailing SK Hynix in memory, the gap is narrowing. “If Samsung Electronics fails to surpass SK Hynix this time, it may lose future opportunities,” an industry insider said.
The recent appointment of the DS division head signifies the return of a former vice chairman with semiconductor expertise rather than a promotion. Concurrently, Kim Yong-kwan, CEO of Samsung Medison, was appointed to the Samsung Electronics business support TF semiconductor division, known for his semiconductor investment expertise. Industry insiders view these moves as “bringing back experienced semiconductor professionals to enhance memory competitiveness.”
Samsung Electronics has consistently employed shock therapy to navigate crises effectively. Even during the semiconductor boom, the late Chairman Lee Kun-hee instilled a sense of urgency within the organization, famously remarking, “Thinking about five or 10 years ahead makes my back sweat.” Similarly, the recent personnel changes are interpreted as the company’s shock therapy to address a lack of overall crisis awareness while leading the memory market.
In the semiconductor sector, talent appointments have helped overcome crises. During the foreign exchange crisis in 1997, then-Vice Chairman Chin Dae-jae was appointed CEO of System LSI to bolster the non-memory semiconductor sector, which boasted a larger market than memory. Former President Hwang Chang-gyu, who led the memory business unit in 2000, ascended to overall semiconductor president in 2004, propelling Samsung to global leadership in NAND flash memory despite entering the field late. Kwon Oh-hyun, who assumed the presidency of the semiconductor business unit in 2008, is credited with guiding Samsung to victory in the DRAM price reduction competition, colloquially known as the “chicken game.” Despite numerous companies going bankrupt, Samsung remained the leading DRAM company.
