Samsung heir once again urges company to be bold for future growth

Samsung made it clear two weeks ago that it faces grave challenges and that it’s buckling up to tackle them. It’s having to work around slow demand for memory chips as well as the decline in the profitability of OLED panels. Both have been significant contributors to its record-breaking profits over the past few years.

The company is now looking for engines of future growth. Its heir, Vice Chairman of Samsung Electronics Lee Jae-yong, has been calling on the company to aggressively make new investments that secure Samsung’s place in the future.

Samsung heir wants to secure future growth drivers

Lee Jae-yong met with the five heads of Samsung’s core divisions two weeks ago. He said that the company shouldn’t be swayed by short-term opportunities and performance. He also said that Samsung should instead focus on securing fundamental technologies for long-term business. Lee reconfirmed that Samsung will be investing $115 billion in its non-memory chip sector business in order to become a leader in this industry by 2030.

He gave a similar message to the global strategy meeting this past weekend. Lee met with executives of the IT and mobile division at the company’s Suwon headquarters in Seoul. “We have to make bold investments for the future regardless of any changes in the business environment,” he was quoted as saying. He added that “No company can guarantee they will be around 10 years from now,” and that “We have to have a mindset of starting new businesses, beyond resting on what we’ve achieved so far.”

He will likely be giving a similar message during his visit to Samsung Electro-Mechanics today, an affiliate of the conglomerate that manufactures electronics parts. Lee will also be discussing the business strategy of Samsung’s semiconductor packaging technology and 5G telecom equipment.

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Samsung Display remains the leader in global display market

The latest data from IHS Markit shows that Samsung Display has retained its dominant position as the top global smartphone display vendor in the first quarter of this year. It was able to do that as more smartphone manufacturers opted for OLED panels for their premium devices. Samsung picked up the bulk of those orders.

Samsung’s display affiliate is estimated to have shipped $3.4 billion worth of smartphone displays in the first quarter ending March 2019. It accounted for 40.2 percent of the smartphone display market in this period. Samsung Display also accounted for 80 percent of OLED panel supplies.

Samsung Display retains its leadership

It’s pertinent to mention here that Samsung’s Q1 market share is 6.6 percentage points lower than it was in the same period last year. However, the company has been able to keep its market share over 40 percent for eight consecutive months.

None of its competitors are even close in terms of market share. Japan Display came in second place with a 12.3 percent market share while China’s BOE came third with 11.9 percent. What’s interesting to note is that BOE’s market share has almost doubled compared to the same period a year back.

Samsung is having to work around demand uncertainties with OLED display panels. It was reported about a year ago that the company was looking to build a “super OLED factory” in South Korea. It would have had 30 percent more production capacity compared to the A3 plant in China. Samsung would have invested almost a billion dollars into the new factory. However, it was later reported that Samsung had decided to put the project on ice until it’s sure about sustained demand in the market.

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