Samsung Electronics Co. is changing the head of its semiconductor division, naming a seasoned memory chip veteran to lead efforts to catch up with SK Hynix Inc. in the booming arena of artificial intelligence.
Korea’s largest company has named Jung Yong-hyun the new head of its most important business area. He will replace Kyung Gye Hyun, who will lead the Samsung Institute of Advanced Technology and the future business team. Jun, 63, joined the unit in 2000 and helped the company develop core DRAM and flash memory chips for smartphones and servers.
The appointment comes after Kyung offered to step down from his post, according to a person familiar with the situation, who asked not to be identified discussing personal information. Samsung lags behind SK Hynix in high-bandwidth memory or HBM chips, which are seeing explosive growth as they are used to train artificial intelligence models such as ChatGPT.
“It’s unusual for Samsung to make such a leadership change mid-year,” said Sanjeev Rana, an analyst at CLSA Securities Korea. “It underscores Samsung’s desperate attempt to bring new energy and fresh thinking to its semiconductor business, where its leadership is slipping.”
Investors are increasingly concerned about Samsung’s reaction to its smaller rival, which recently… reported This is the fastest revenue growth rate since at least 2010. This has sent SK Hynix shares up 36% since the start of 2024, far outpacing Samsung shares, which are little changed.
Stock market reaction on Tuesday was initially muted. Samsung shares continued to decline following the announcement, falling less than 1%. Shares of SK Hynix rose 1.1%.
SK Hynix is the largest supplier of memory used to develop services like ChatGPT worldwide. Its production capacity for producing such chips is almost fully booked until next year.
The company plans to spend about $14.6 billion to build a new complex in South Korea to meet demand for HBM chips that work alongside Nvidia Corp. accelerators. in the creation and deployment of artificial intelligence platforms. The company is also building a $4 billion packaging facility in Indiana, its first in the United States.
Samsung, which also makes logic chips and operates a foundry business, also went on board on a global expansion that includes a $40 billion investment in U.S. chip manufacturing.
In the foundry business, Samsung is struggling to win big customers and limit the Taiwan semiconductor company’s overwhelming lead in cutting-edge chip production.
Jun’s appointment comes at an age when most Samsung executives retire, CLSA’s Rana said. “His experience was deemed essential to help Samsung navigate the current challenging situation,” he said.
Samsung has begun mass production of its latest HBM product, the eight-layer HBM3E, and says it plans to begin mass production of 12-layer HBM chips in the second quarter. The company expects GBM shipments to at least triple in 2024 compared to last year.