Samsung names Jay Y Lee executive chairman amid global economic downturn • TechCrunch

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Samsung Electronics has appointed Jay Y. Lee as CEO to lead the world’s largest maker of memory chips and smartphones, two months after Heir to a presidential pardon Which led to the 54-year-old’s criminal record being erased.

Last year, Lee was released from prison after serving 18 months in prison for allegedly bribing former South Korean President Park Geun-hye. The parole banned Lee from work for five years and restricted travel abroad. In August, Lee received a special presidential pardon, which allowed Lee to formally participate in management, restore his right to work at Samsung and speed up decision-making on key strategies from chipmaking to investment plans.

Lee, who has been Samsung’s vice president since 2012, was expected to take over the tech giant after the death of his father, Kwon Hee Lee, the late Samsung Group Chairman, in 2020.

The long-awaited appointment comes amid shrinking 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 for stronger accountability and business stability in approving the recommendation,” Samsung said in a statement.

South Korea’s largest memory chip maker said today that it operating profit For the third quarter, it declined 31.39% from the same period last year to KRW 10.85 trillion ($7.7 billion). Earnings in his memory stick and Large-scale System Integration (LSI) business It fell to KRW 5.12 trillion, from KRW 10.07 trillion a year ago, due to weak demand for consumer products, mobile phones and televisions, according to the company. This is Samsung’s first year-over-year profit decline since 2019.

Samsung mentioned sales KRW 76.78 trillion (about $54 billion) in the three months to September, which is a 3.79% increase from the previous quarter last year.

The company expects to cover orders for electronic devices and chips to some extent in 2023 although macroeconomic uncertainties are likely to persist. “In the memory industry, after a weak first half, demand is expected to rebound with a focus on servers as data center installations resume,” the company said in its statement.

The downbeat earnings come nearly three weeks after the Biden administration announced sweeping new rules It aims to prevent China from accessing advanced chip elements. The restrictions prevent the export of some semiconductors and the sale of equipment using advanced technologies to chip manufacturers in China.

Leading global semiconductor makers, including Samsung Electronics, TSMC and SK Hynix, have been given one-year permission to use US technology to sell advanced semiconductor chips for supercomputers and artificial intelligence to Chinese companies. SK Hynix, which competes with Samsung in the memory chip segment, said Wednesday that it plans to cut its 2023 capital expenditures by more than 50% after reporting a 60% drop in its third-quarter profit.

Samsung sells NAND and DRAM chips used in laptops, smartphones, and data storage. The tech giant said earlier this month that it plans to produce more than three times the production of advanced chips for high-performance computers, artificial intelligence, 5G and 6G carriers and cars. Samsung aims to start making 2nm chips by 2025 and 1.4nm by 2027.

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