Samsung CEO Out Amid 'Unprecedented Crisis'

Samsung Electronics CEO and Vice Chairman Kwon Oh-hyun is relinquishing both roles, the South Korean tech giant said Friday.

The surprise announcement is more bad news for Samsung -- coming just months after its heir apparent, Jay Y. Lee, was sentenced to five years in prison for bribery.

"As we are confronted with unprecedented crisis inside out, I believe that time has now come for the company start anew, with a new spirit and young leadership to better respond to challenges arising from the rapidly changing IT industry," Kwon said in an official statement.

Despite what Kwon characterizes as a management “crisis,” Samsung is doing pretty well financially. Indeed, the company expects record operating profits of about $12.8 billion for the third quarter.

For its bottom-line boost, the company credited the success of its Galaxy S8 smartphone, along with strong memory-chip sales.

Yet, Kwon insists that the strong profits don’t reflect the current state of the company.

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“We are fortunately making record earnings right now, but this is the fruit of past decisions and investments,” he stated. “We are not able to even get close to finding new growth engines by reading future trends right now."

Those words don’t bode well for Bixby, Samsung’s virtual assistant, and its accompanying smart speaker. U.S. tech titans, like Amazon and Google, have taken a clear lead in both fields. If Kwon is right, Samsung won’t catch up anytime soon.

Looking to one-up U.S. rivals in other arenas, Samsung recently vowed to launch a foldable smartphone sometime next year.

The company also recently committed $300 million to a new Automotive Innovation Fund, which will support innovation in the auto market. Previously, the tech giant p ledged nearly $90 million to TTTech, which develops platforms and safety software for connected cars.

Kwon has served as Samsung’s CEO since 2012. He joined the company in 1985 as a researcher in its U.S. semiconductor research institute.

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