From left: Samsung Electronics Vice Chairman Jun Young-hyun, Vice Chairman Han Jong-hee, President Han Jin-man in charge of the foundry business, President Kim Yong-kwan in charge of chip business management strategy and President Lee Won-jin in charge of global marketing for electronics appliances. (Yonhap)

Samsung Electronics, the world's leading smartphone and memory chip maker, announced a major personnel reshuffle on Wednesday, replacing the top brass at its sluggish chip-making business division.

While retaining the three vice chairs for management stability, the company replaced the heads of its chip business units and created two new positions to enhance operational efficiency.

"The company sought to overcome uncertain internal and external business challenges and aim for a new breakthrough via the personnel shakeup," the company said in Wednesday's announcement.

Samsung's Vice Chairman Jun Young-hyun, appointed as the head of the company's chip division in May, has been entrusted with more roles, being named the chief executive officer and the head of the memory chip business. He has also been appointed head of Samsung Advanced Institute of Technology.

The company's decision to bring its memory chip business under the direct management of Jun shows its shift in strategy to concentrate efforts on competing in the burgeoning High Bandwidth Memory chip market, in which Samsung is lagging behind its smaller rival SK hynix.

In the quarterly earnings report for the July-October period, Samsung's chip division posted 3.86 trillion won ($2.8 billion) in operating profit, only half of what the crosstown rival achieved in the same period. The underwhelming performance in the chip business has been largely blamed for dragging down the company's overall profit.

At the same time, the tech giant appears to be strengthening the dual-CEO system with Jun's appointment and retaining Han Jong-hee, the vice chairman overseeing the company's mobile and electronic appliances business.

For its contract chip manufacturing or foundry business grappling with the task of enhancing the yield rate for its most advanced chipmaking processes, the company replaced the chief and established a new chief technology officer position.

Han Jin-man, previously executive vice president and president leading the company's chip business in the US headquarters, has been promoted to president to oversee the foundry business.

For the newly-created CTO position, manufacturing veteran Nam Seok-woo was appointed. Nam, who was president and head of FAB Engineering & Operations, has extensive experience in memory process and foundry technologies, according to the company.

Samsung's foundry business is standing at a crossroads, failing to attract big tech firms to capitalize on the surging demand for AI chip manufacturing. While it stands as the world's second-largest foundry after the giant TSMC, it is expected to face operating losses amounting to several trillion Korean won this year.

To boost business management for the overall chip division, the tech giant also created a new president-level role for management strategy and appointed Kim Yong-kwan to the position. Kim was previously executive vice president of the Business Support TF.

Under the renewed leadership, the tech giant is expected to pursue structural changes to revamp the chip business. Samsung Chairman Lee Jae-yong this week pledged to do everything he could for the company to overcome the hardships it faces. The chip leader Jun also issued a rare apology in October, promising to restore "fundamental competitiveness" in technology.

In the follow-up reshuffle expected in the coming days, the company is also expected to replace some 100 of 400 executives in the chip business.

In other parts of the company, the tech giant established a product quality innovation committee and appointed the CEO Han Jong-hee as the chief. The company also named Executive Advisor Lee Won-jin as president and head of the Global Marketing Office. President Park Hark-kyu, previously the chief financial officer, has been moved to the Business Support TF.

Lee Young-hee, Samsung's first female president appointed in 2022 to lead the Global Marketing Center for the electronics appliance business, has transitioned to a new role as a member of the brand strategy committee.