Samsung Electronics CEO to Mysteriously Resign Amid Record Profits

Samsung Electronics CEO to Mysteriously Resign Amid Record Profits

The CEO of Samsung Electronics Kwon Oh-Hyun resigned Friday, saying the South Korean tech giant was facing an "unprecedented crisis", even as it expected profits to hit an all-time high in the third quarter.

A large part of Samsung's recent success stems from Kwon's leadership of Samsung's components and display business, which not only provides the screens, memory, and other components in its own devices, but also supplies parts to many of Samsung's biggest competitors, including the OLED display on Apple's iPhone X.

Kwon is chairman of Samsung's board, but not its overall chairman.

In a letter sent to all employees, Kwon said that announcing his retirement was the most hard thing for him to do, but now was the right time and that he believes his decision is in the best interest of the company.

The "unprecedented crisis" Kwon referenced is the conviction of Lee earlier this year on bribery charges, landing the 49-year-old exec a five-year prison sentence.

In its earnings preview, Samsung put its July-September operating profit at 14.5 trillion won (US$12.8 billion), compared with 5.2 trillion won ($4.6 billion) a year earlier.

"Kwon himself might have thought over the issue for a long time", a Samsung spokesperson said, "but the notice itself was a surprise internally as well". That is Lee Kun-hee, son of the company's founder and Lee Jae-yong's father.

Despite the spectacular performance, Kwon said the company was in the throes of an "unprecedented crisis" as he announced his intention to step down. Sales increased 20% year over year during the quarter.

The company is set to release its final earnings report on October 31.

Samsung did not name a successor to Kwon.

"The company has been riding a global semiconductor boom", he said, adding that the semiconductor business alone is believed to have contributed 10 trillion won to the operating profit.

Rising sales of its flagship Galaxy S8 and Galaxy Note 8 smartphones were also believed to have bolstered the profitability of the mobile division, analysts said. This business generates more profits compared to smartphone and other businesses.

The consumer electronics division will also benefit from strong seasonal demand, he added. Samsung hasn't given out information on the timing of succession, nor did it share who will take on Kwon's responsibilities when he leaves next year.