updated 06:32 am EDT, Thu June 7, 2012
Samsung shuffles leadership, to build new chip line
In a surprise announcement, Samsung has replaced its current CEO Choi Gee-sung with Vice-chairman and components chief Kwon Oh-hyun. According to Reuters, Gee-sung has been shuffled into a new role focusing on 'future growth engines' at Samsung's Group Corporate Strategy Office, while Oh-hyun will now also be in charge of 'corporate-wide affairs.' The timing is somewhat unusual given that Choi Gee-sung was only recently in the US representing Samsung for the failed mediation talks with Apple CEO Tim Cook in relation to its ongoing legal battle with Apple.
Perhaps trying to deflect the attention away from its leadership reshuffle, the South Korean technology giant also announced that it will invest $1.9 billion as it transitions its mobile chip fabrication to a new smaller and more efficient 20 nanometer and 14 nanometer scale, along with using 300mm wafers. The new production facility will produce the next-generation of mobile chips for its Galaxy smartphone and tablet range.
Samsung is said to be aggressively targeting the production of mobile chips, particularly as the general level of demand for PCs remains relatively flat. According to research firm Gartner, the mobile chip market is expected to increase from $23 billion in 2011 to $59 billion in 2016. By taking the next steps in further developing its mobile chip capabilities, it will also be better placed to address a renewed challenge from Intel with the arrival on the market of its Medfield-based Atom processors for mobile devices.
Although Samsung makes mobile chips for its own products as well as Apple, it has often had to source chips from other manufacturers in its handsets. Although the international version of the Galaxy S III uses Samsung's own quad-core Exynos 4412, its US version uses the US-produced Qualcomm Snapdragon S4 processor. It also currently uses mobile chips from TI. The development of the new production line may help it become more self-reliant, while still having the capacity to manufacture chips for others.