Samsung reshuffles leadership amid AI chips battle

SEOUL

Samsung Electronics reshuffled its leadership on Wednesday as it looks to gain an edge in the production of microchips used for artificial intelligence servers.

The world's largest memory chip maker issued a rare apology in October, acknowledging it was facing a "crisis" and that questions had arisen about its "fundamental technological competitiveness and the future of the company.".

On Wednesday it tapped vice-chairman Jun Young-hyun to lead its memory business and appointed Han Jin-man, who headed the firm's U.S. chips business, as the new boss of the chip foundry division.

The reshuffle aims to "strengthen the company's growth and future competitiveness, focusing on the semiconductor business," Samsung said in a statement.

While the firm posted a 277 percent rise in operating profits to $6.6 billion year-on-year in the third quarter, it missed market expectations. Its shares have fallen more than 27 percent this year.

Samsung has lagged South Korean rival SK hynix in producing high-bandwidth memory (HBM) chips used in AI chipsets and has struggled to secure certification from U.S. titan Nvidia for its latest products.

The delayed approval process has allowed Samsung's competitors to challenge its position in the fast-evolving market.

The leadership change comes as chairman Lee Jae-yong faces legal challenges.

Prosecutors this week demanded a court sentence him to five years in prison over a controversial 2015 merger of two affiliates that consolidated his control over the Samsung group.

They say that Lee committed multiple crimes, including stock price manipulation, breach of trust, and accounting fraud.

Lee was acquitted in a lower court, which prosecutors appealed. A verdict on that is expected in February.

Lee, who has already served jail time over a high-level fraud and embezzlement case, is the current executive chairman of Samsung Electronics.