(Bloomberg) — Samsung Electronics Co. named Jay Y. Lee executive chairman of South Korea’s largest company, finalizing a long-anticipated elevation just as a supply chain crisis and escalating geopolitical tensions roil the world’s biggest chipmaker.
The board approved the 54-year-old’s ascension to the helm of the $250 billion company Thursday, Samsung said in a statement. While Lee had been expected to take over the post after his father died in 2020, his ascension had been delayed by graft investigations and two stints in jail.
The decision emerged the same day his company reported disappointing earnings and warned it didn’t foresee a recovery in technology demand till the second half of 2023 — underscoring the magnitude of Samsung’s challenge ahead.
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The elevation formalizes Lee’s status as the nation’s most prominent business executive and one of its chief economic ambassadors. While the move may not make much difference in the short run given Lee was already de-facto leader, a formal title could smooth Lee’s efforts to guide Samsung deeper into semiconductors and biotechnology.
“Without a doubt, we are at a pivotal moment,” Lee said in a statement accompanying his appointment. “Now is the time to plan our next move. Now is the time to act, to be bold and unwavering in our focus.”
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Lee must steer the company through one of the more turbulent periods since his grandfather Lee Byung-Chull founded Samsung in 1938. Big nations from the US to Europe are urging Samsung to increase investment in their backyards to secure their supply of chips. Washington’s campaign to curb China’s chipmaking ambitions is increasingly forcing allies like South Korea, which depends heavily on the Chinese market for exports, to pick a side.
More immediately, the emergence of new technology such as artificial intelligence and supercomputing is forcing technology giants to adapt and think strategically about the future.
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The succession comes after a years-long leadership vacuum at the crown jewel of the Samsung group. Lee has been embroiled in bribery and corruption investigations dating back to 2017. In August, he won a presidential pardon that allowed him to formally take the helm at the company. Speaking in front of media at the time, Lee apologized to the Korean public and promised to “start anew.”
Lee, who has an extensive global network developed over several decades under his father’s guidance, has stepped up as the nation’s relief pitcher during the pandemic and chip shortage crisis. He played matchmaker between companies and governments, helping ramp up mask and vaccine production as well as a major expansion of chip investments.
The market has been hoping Lee’s return would drive growth at Samsung through major mergers and acquisitions, as well as accelerate strategic decisions on where Samsung should invest in future technology, boosting shareholder value.
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Lee earned an undergraduate degree in East Asian History at Seoul National University, the nation’s top school, and a master’s degree from Japan’s Keio University. He also studied for his doctorate at Harvard Business School, though he didn’t get a degree.
The executive joined Samsung Electronics in 1991 and was promoted to vice chairman in 2012, with the company citing his achievements in the phone, TV and components businesses — including forging partnerships with Apple Inc. and Google. Samsung remains the largest seller of phones using Google’s Android software.
Lee will take the helm after his father achieved mythical status in South Korea, credited for his vision for pushing an appliances maker into semiconductors and smartphones. In the process, the elder Lee became the nation’s richest and most powerful tycoon.
The new chairman owns 1.63% of Samsung Electronics and 18.13% of the group’s de-facto holding company Samsung C&T Corp., according to data compiled by Bloomberg. Lee is worth about $5.9 billion, according to the Bloomberg Billionaires Index.
–With assistance from Mayumi Negishi.
(Updates with earnings and Lee’s comments from the third paragraph)
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