Samsung CEO steps down after forecasting Record Earnings

Samsung CEO steps down after forecasting Record Earnings

IT

"Samsung tipped record earnings, it's going to be better in the fourth-quarter, and all that's been driven by Kwon's components business", said Park Ju-gun, head of research firm CEO Score.

In August of this year, the group's heir apparent Lee Jae-yong was convicted of bribery and corruption and sentenced to up to five years in jail.

The announcement happened on the same day the South Korean based electronics company forecasted for recording breaking earnings in the third quarter.

The move comes just as Samsung has announced record profits, thanks largely to its memory chip business, prompting one industry analysts to describe its timing as "nonsensical".

Samsung expects to pull in 62 trillion won ($54.9 billion) in revenue and 14.5 trillion won ($12.8 billion) in profit for the three months ending September 30, a near 300% increase in profit compared to the same period a year ago.

The "unprecedented crisis" that Kwon may be alluding to is the arrest of Lee Jae-yong, the de facto leader of the Samsung. "It is something I had been thinking long and hard about for quite some time". He expressed a "deep sense of pride and honor" in an emotional letter to employees, but ultimately concluded that now more than ever Samsung is need of a new leader, and that he is ready to embark on the next chapter of his life.

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Kwon, however, thinks Samsung is in crisis and urgently needs to find new ways to fuel growth before the record-breaking performance resulting from earlier decisions fades.

Samsung has two other CEOs, each overseeing its mobile phone business and home appliance division. But it could also encompass Samsung's recall fiasco with the Note7 smartphone past year, with the flagship smartphone having to be pulled off of market shelves due to a fire hazard with its charging mechanism.

"Kwon himself might have thought over the issue for a long time", a Samsung spokesperson said, "but the notice itself was a surprise internally as well". He has been appointed as the CEO of the Samsung group on 2012.

Lee was arrested for bribery charges in February 2017.

Kwon is stepping down as head of Samsung Electronics' device solutions division, which includes the semiconductor business, and will not seek re-election as a member of the company's board when his term ends next March.

  • Kyle Warner