South Korea’s Samsung has named corporate heir Jay Y Lee as the group’s executive chairman.
The move by the tech giant’s board of directors, while not unexpected, given Lee is the third generation one the group’s founding family, is notable because he recently served two and a half years in jail.
The appointment comes five years after Lee was convicted of bribery and embezzlement in 2017, and released from jail after serving a two and half year term. He was granted a special pardon by new President Yoon Suk-yeol in August.
The appointment follows his release from jail last year for bribery convictions, of which he has since been pardoned, allowing him to formally assume the leadership role he has held since his father, the late patriarch and Samsung Group chairman Lee Kun-hee, was hospitalised in 2014. The elder Lee died in 2020.
Lee, 54, has been vice chairman of Samsung Electronics, the crown jewel of South Korea’s biggest business conglomerate, since 2012.
“I am filled with a deep sense of responsibility to preserve his legacy, and to build on it – for our future,” Lee said in a memo shared with Samsung employees on Thursday, discussing his late father.
“Without a doubt, we are at a pivotal moment… Now is the time to plan our next move. Now is the time to act, to be bold and unwavering in our focus.”
Living Up to His Father
Critics claim Lee doesn’t have experience, lacks his father’s charisma and hasn’t made a major mark that can be counted in his achievements.
“Until now, Lee hasn’t really shown his own management style,” Park Ju-gun, head of analysis firm Leaders Index, said.
But Samsung insiders say his quiet, urbane manner disguises a steely determination that Lee will need if he is to grow Samsung.
As an only son, Lee was groomed by his father to take over the core business of Samsung Group, which his grandfather founded in 1938. But legal troubles in recent years forced him to step back from frontline management.
“My shoulders have become very heavy,” he told reporters as he left a court hearing on Thursday. “I will create a company that is trusted and loved by the people a bit more.”
Samsung, a $280 billion global tech titan, faces mounting business headwinds amid a sharp downturn in global tech demand, caused by soaring inflation, interest rates and a gloomy economic outlook.
Samsung reported a 31% drop in third-quarter profit on Thursday and said geopolitical uncertainties were likely to dampen demand until early 2023.
“Samsung is still rather top-down,” Kyungmook Lee, who co-authored ‘The Samsung Way’, said. “He faces the task of changing the corporate culture to fit the current times.”
Semiconductors remain Samsung’s biggest cash cow, but business conditions have become much more complex amid efforts by the US to slow China’s advance in chip technology.
That is a major business risk for Samsung, which counts both China and the United States as major markets.
Lee is prioritising growth in Samsung‘s foundry business and looking to build contract chip manufacturing as a major revenue stream and dethrone Taiwan’s TSMC from the top position in logic chips by 2030.
- Reuters, with additional editing from Alfie Habershon and Jim Pollard