On Tuesday, Samsung Electronics Co Ltd announced that it would join its mobile and consumer electronics businesses, selecting new co-chief executives in its most significant restructure since 2017 to simplify its structure and focus on the logic chip business.
The South Korean firm will be led by two co-chief executives, rather than three, as it pivots on the two core pillars of chips and consumer products, such as smartphones, to help drive the next growth phase and increase competitiveness.
Samsung, whose Galaxy flagship brand helped it become the world's largest smartphone manufacturer by volume, is attempting to resurrect flagging mobile growth, which contributed only 21% of profits last quarter, down from over 70% in the early 2010s.
Instead, thanks to a surge in data storage and a recent shortfall of global semiconductor supplies, its component business, led by chips, has become the most profitable.
The company accounted for over three-quarters of Samsung's operating profit of 15.8 trillion won ($13.4 billion) in the previous quarter.
Samsung said that Han Jong-hee, the leader of the visual display business, will join the company as a co-CEO, managing the newly merged division that includes mobile and consumer electronics and television operations.
Without any prior expertise in mobile, Han has ascended through the ranks of Samsung's visual display division.
It's unclear what kinds of adjustments or labour divides were envisioned under Han. Analysts believe the reorganisation will help Samsung address issues by providing seamless connectivity between its devices and home appliances.
"In the long term, the biggest challenge is forming a platform of Samsung's own," said Lee Jae-Yun, an analyst at Yuanta Securities Korea.
"Those businesses have to keep increasing connectivity between devices, but so far it hasn't been able to create a lasting platform with presence."
More immediate issues, according to analysts, include a scarcity of chip supplies, rising raw material prices, logistical challenges, and rivalry from Apple Inc. and Chinese rivals, all of which are contributing to fears about a declining mobile industry.
The company focuses on semiconductors, artificial intelligence, robots, and biopharmaceuticals, with plans to invest 240 trillion won ($206 billion) over the next three years in these sectors.
The company's flagship, Samsung Electronics, wants to surpass TSMC as the world's leading semiconductor contract manufacturer by 2030 by investing $150 billion in logic chip operations, including foundries.
After months of deliberation, Samsung chose the Texas city of Taylor for a projected $17 billion chip facility late last month, coinciding with Lee's first business trip to the US in five years.