World's biggest startup? Samsung to reform corporate culture

SEOUL - Samsung Electronics Co Ltd, the world's biggest maker of smartphones and memory chips, announced on Thursday that it plans to adopt a corporate culture akin to a startup, seeking to become more nimble as growth slows.

Samsung's executives will sign a pledge to move away from a top-down culture and towards a working environment that fosters open dialogue.

The flagship firm of South Korea's dominant conglomerate will also reduce the number of levels in its staff hierarchy and hold more frequent online discussions between business division heads and employees.

"We aim to reform our internal culture, execute as quickly as a startup company and push towards open communication and continuously innovate," it said in a statement.

The pronouncement is the latest among sweeping changes attempted at a time of crisis by the conglomerate and carries echoes of a 1993 exhortation by Samsung Group patriarch Lee Kun-hee to executives to "change everything but your wife and children".

Hurt by a rapid decline in smartphone profits and the absence of new businesses to drive growth, Samsung has been under pressure to reform its military-style working culture to foster innovation.

Some current and former employees say it will be difficult for a company like Samsung, which has global headcount of more than 300,000, to transform itself. Analysts also say there is the risk of Samsung losing its edge as a fast-execution hardware company by attempting to change its ways.

Lee has been hospitalized since a 2014 heart attack, and the group is in the midst of a transition to control by his son, Jay Y. Lee.

Other moves in recent years to ease a rigid corporate culture include flexible working hours, a loosening of dress code requirements for weekend work and less pressure on employees to attend after-work drinking sessions that have long been a staple of Korean corporate life.

Samsung said it will also cut down on unnecessary internal meetings and simplify reporting procedures in order to improve productivity and offer training to employees to strengthen their "winning spirit".

It will also reduce unnecessary overtime and weekend work and push employees to spend time with their families or take advantage of learning opportunities.

source: www.abs-cbnnews.com

Samsung to invest $14.7-B in S. Korea chip facility

SEOUL - Samsung Electronics Co Ltd plans to invest $14.7 billion to construct a new chip production plant in South Korea, a major bet on its semiconductor business amid a smartphone earnings slump.

Samsung, the world's biggest memory chip maker, said the new plant will help boost its competitiveness in the semiconductor industry, which it is showing steady growth due to increased demand from mobile devices.

The plant will make either logic or memory chips, Samsung said, adding that a final decision on products had not been made yet. The firm said its chip production capacity was expected to increase by a "low double digit percentage".

The plant will be located in Pyeongtaek, a city roughly 75 kilometers south of Seoul and construction is scheduled to be completed by the second half of 2017.

The chip business is likely to be a lone bright spot in what's otherwise expected to be a poor third quarter for the South Korean giant.

Profits for company's key smartphone business are slipping rapidly as Apple Inc grabs the lion's share of profits at the high end of the market and Chinese makers of cheap and feature-rich smartphones, like Lenovo Group Ltd and Xiaomi Inc, erode margins at the low end.

The mean forecast from a Thomson Reuters I/B/E/S survey of 42 analysts calls for the firm's July-September operating profit to come in at 5.6 trillion won, its weakest performance since the fourth quarter of 2011.

Some analysts forecast that the chip division could deliver stronger operating profit than the handsets division in the third quarter for the first time in more than three years,

Market conditions for the memory market have remained favorable amid stronger-than-anticipated demand from personal computer and servers. Industry players like Samsung have also be managed their capacity expansion carefully, keeping supply tight.

source: www.abs-cbnnews.com