Jay Y. Lee, the existing head of Samsung Electronics, was appointed executive chairman on Thursday. This symbolic action confirmed that the third generation of the founding family will now formally control South Korea’s most valuable company.
The highly awaited appointment takes place as market uncertainties are brought on by the economic slump and declining worldwide demand for chips and cell phones. Since 2012, Lee has served as vice chairman of Samsung Electronics, the most valuable subsidiary of South Korea’s largest business union.
Two months prior, the 54-year-old heir had his criminal record wiped by a presidential pardon. After serving 18 months in prison for bribing Park Geun-hye, Lee was released from prison last year on parole. Lee was restricted from travelling abroad and prohibited from working for five years by parole. Lee was granted a special presidential pardon in August, which granted him official management participation, restored his right to work at Samsung, and accelerated the company’s decision-making on major strategies, including investment plans and chip manufacturing.
“The Board cited the current uncertain global business environment and the pressing need for stronger accountability and business stability in approving the recommendation,” Samsung said in a statement. As the global economic slowdown reduced demand for electronic gadgets, Samsung announced a 31% decline in third-quarter profit on Thursday and stated that geopolitical concerns were likely to stifle demand until early 2023.
Despite continued macroeconomic uncertainty, the business anticipates some coverage of the demand for electronic products and chips in 2023. The company stated in their statement that after a muted first half, demand is likely to rebound centred on servers as data centre installations resume.
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