Samsung electronics names component business Head as CEO

By AGENCIES

SAMSUNG Electronics Co. (005930), Asia’s largest electronics maker, named Kwon Oh Hyun, head of the company’s display and chip business, as chief executive officer after his division led the company out of an industry downturn.

Kwon, who was promoted to vice chairman in December, will work with consumer electronics head Yoon Book Keun, while also handling broader corporate matters, Samsung Group, parent of the electronics maker, said in a statement today. Outgoing CEO Choi Gee Sung will lead the group’s strategy office, according to the statement by the Suwon, South Korea-based company.

Kwon helped Samsung, the top maker of computer-memory chips, weather a slump last year by expanding into more profitable semiconductors for mobile devices and servers. Kwon is taking over a business valued at $159 billion that’s also No. 1 in mobile phones and televisions as global competition intensifies.

“The consumer electronics business is still making much more money,” Lee Sun Tae, a Seoul-based analyst at NH Investment & Securities Co., said by phone. “He won’t prioritize one area over another, but consumer electronics will remain a more profitable business, and he’ll take that into account.”

Samsung ended Nokia Ojy’s 14-year run as the global leader in mobile phones for the first time last quarter, while regaining the lead in the smartphone market from Apple Inc. (AAPL) The iPhone maker made a new court filing on June 5 to block sales of the latest Galaxy smartphones in the U.S, deepening a global patent dispute.

Samsung rose 5.2 percent, the most since Dec. 1, to 1,256,000 won as of the close on the Korea stock exchange. The shares have advance 20 percent this year, compared with a 1.2 percent gain on the benchmark Kospi index.

Separately, Samsung said it plans to build a multibillion dollar semiconductor factory in South Korea.

The company will spend 2.25 trillion won ($1.9 billion) to build the plant to meet rising demand for chips powering mobile devices, Samsung said in a statement today.

The production line will be built in Hwaseong, South Korea, south of Seoul. The company seeks to complete construction by the end of 2013, according to the statement.

Samsung is shifting away from making computer memory to more profitable mobile chips as smartphones and tablet computers cut into demand for bulkier machines.

The company plans to spend 15 trillion won on the semiconductor business this year as it challenges Taiwan Semiconductor Manufacturing Co. in contract chip manufacturing, building on its exclusive deal to make Apple Inc.-designed processors running the iPhone and iPad.

“The size of the investment is very massive,” Choi Do Yeon, a Seoul-based analyst at LIG Investment & Securities, said by phone. “It shows Samsung’s strong will to focus on the non- memory side, rather than the memory side.”