Despite excitement in the market over the news that Samsung Electronics is set to become the most profitable company in the world, executives at the tech giant’s Seoul office remain wary about the company’s future, citing its top leadership vacuum.
On Friday, Samsung Electronics announced that it had reached 60 trillion won ($51 billion) in estimated revenues and 14 trillion won in operating profits in the second quarter, the highest levels in the company’s history.
Employees walk past the Samsung Electronics building in Seocho-gu, Seoul. (Yonhap)
The boost came from the company’s semiconductor business, which saw a spike as businesses have been investing in memory chips for their data centers.
Executives were quoted in news reports as crediting the profits to bold investments made three to five years ago by members of the owner family through the now defunct Corporate Strategic Office, a former control tower of Samsung companies.
However, with Samsung Chairman Lee Kun-hee incapacitated and Vice Chairman Lee Jae-yong, the chairman’s only son in custody over a high-profile bribery scandal involving former President Park Geun-hye, the company stands today with its top management vacant.
In the absence of top leadership as well as the control tower, Samsung will find it difficult to make bold and strategic decisions compared to in the past, Samsung officials said.
It will also be hard to make additional investments or major acquisitions to arm itself against the eventual fall in demand and competition from Chinese companies, they added.
Samsung’s heir apparent Lee is undergoing trial while remaining in custody.
Under the law, the court can detain him until Aug. 27. Lee will go free if he is found not guilty of charges of bribing the former president’s longtime friend’s family in exchange for a favor that lifted hurdles on a controversial merger between Samsung affiliates.
The merger between Samsung C&T and Cheil Industries was a major step for him to tighten his control of Samsung Electronics, in which he holds only 1 percent of shares.
By Won Ho-jung (hjwon@heraldcorp.com)