Samsung reorganizes chip, LCD divisions

(ATTN: RECASTS lead, headlines; ADDS info in para 2-7)
By Lee Youkyung
SEOUL, July 1 (Yonhap) -- Samsung Electronics Co., the world's top maker of memory chips and liquid crystal display (LCD) panels, said Friday that it created an umbrella division to oversee its semiconductor and LCD panel businesses and appointed its semiconductor chief to lead both.
Kwon Oh-hyun, president of Samsung's semiconductor business, began his widened role as chief of digital solutions, overseeing Samsung's memory chips, system LSI and LCD panel sectors, according to the company's statement. The appointment took effect as of Friday.
Chang Won-kie will leave his position as president of the LCD division and aid chief executive officer and vice chairman Choi Gee-sung on chip and panel facilities, Samsung said.
Shin Jong-kyun, president of Samsung's mobile business, will assume an additional role of overseeing the company's digital camera business, it added.
Samsung said that it created a new structure to facilitate collaboration between semiconductor and LCD panel businesses. The two divisions were expected to report second-quarter earnings falling short of expectations.
The move will reinforce the independence of its components business from Samsung's TV, mobile phones, PCs and home appliance businesses, it added.
Samsung, the world's second-biggest mobile phone maker, competes with Apple Inc. in the smartphone and tablet markets. But it also counts Apple as the biggest buyer of its semiconductor products.
A Samsung official said earlier in the day that the company will likely replace at least one of its presidents on disappointing second-quarter performance.
An executive reshuffle in the middle of the year is seen as unusual for the South Korean company and suggests future uphill challenges as it battles to cope with stiffer competition from rivals and flagging demand for consumer electronics products. The company usually conducts annual reshuffles at the end or beginning of each year.
Brokerages have revised down estimates of Samsung's second-quarter earnings as lower prices of memory chips, Samsung's flagship products, and LCD panels, used for TVs and mobiles phones, have likely hurt the company's earnings.
Earlier in the day, Choi Gee-sung, Samsung's vice chairman, said in a note to his employees that Samsung faces a "still uncertain" economic outlook for the rest of the year and 2012.
"We need to revamp our internal process and need to introduce products that go beyond customers' expectations to create profits," he said.