Lee Jae-yong's 4-year bet on chips pays off as Samsung profit surges
Samsung Electronics Executive Chairman Lee Jae-yong, center, visits the construction site of Al Dhafra Power Plant in the United Arab Emirates, Wednesday. Courtesy of Samsung Electronics
Diversifying beyond chips, expanding robotics, easing labor tensions remain key challenges
Samsung Electronics Executive Chairman Lee Jae-yong on Tuesday marked his 4th anniversary at the helm of Korea’s largest conglomerate. With Samsung Electronics set to become one of the world’s most profitable companies with over 100 trillion won in operating profit in the third quarter, Lee’s efforts to restore the company’s competitiveness in semiconductor and foster future growth businesses are becoming increasingly evident.
According to Samsung Electronics, the company will not hold an official ceremony to celebrate the anniversary, and Lee will also not issue a separate statement.
Lee was promoted from vice chairman to executive chairman on Oct. 27, 2022, but both before and after his promotion, he has generally refrained from making public statements about the company at formal events, focusing instead on visiting business sites and meeting employees.
When Lee has spoken publicly, it has generally been at times when the company faced a crisis. Upon taking on the chairmanship, he wrote a message calling for investments in technologies that did not yet exist. In March last year, when Samsung's earnings growth slowed after it fell behind rivals in advanced memory chips, such as high bandwidth memory (HBM), Lee said: “What matters is not the crisis itself, but how we respond to it,” adding that the company must invest in its future even at the expense of short-term profits.
Samsung Electronics Executive Chairman Lee Jae-yong speaks during the Korea Society's 2026 Annual Gala in New York, Sept. 28. Courtesy of the Korea Society
In January this year, when the company began showing signs of exponential profit growth in its chip business, he warned against complacency, saying, “this is no time to feel relieved just because the numbers have improved somewhat” and “this is the last chance to improve our competitiveness.”
The remarks resulted in handsome numbers in the company’s third-quarter earnings. In its earnings guidance released on Oct. 8, the company estimated its operating profit at 107.4 trillion won, up 782.5 percent year-on-year. This would make Samsung Electronics the most profitable global tech company in terms of quarterly operating profit, surpassing Nvidia and Apple.
The company has benefited from a global memory chip boom, driven by surging prices amid growing investment in artificial intelligence (AI) infrastructure. At the same time, its proactive investment in technology has helped it regain competitiveness in HBM, once considered one of its biggest weaknesses. Earlier this year, Samsung became the world's first chipmaker to begin mass production and shipments of HBM4, the sixth generation of HBM.
A SEDEX 2026 participant takes a photo of Samsung Electronics' high bandwidth memory 4E at the company's booth at the event in Gangnam District, Seoul, Oct. 14. Yonhap
The profits generated from memory boom is expected to secure financial resources for the company’s investment in next-generation semiconductors and new businesses, particularly for merger and acquisitions in robotics, automotive electronics and AI.
Last year, Samsung Electronics acquired German heating, ventilation and air conditioning company FlaktGroup, the audio business of U.S.-based Masimo and digital health care company Xealth. It also agreed to acquire German automotive supplier ZF's advanced driver assistance systems business through its subsidiary Harman. In robotics, Samsung laid the groundwork for business expansion by making Rainbow Robotics a subsidiary.
Challenges also remain for Lee. On the business front, Samsung Electronics needs to translate the memory chip boom into growth momentum for other businesses. Its Device Experience division, which is in charge of smartphones and home appliances, once served as the company's main profit drivers before semiconductors took the lead, but has have fallen into the red.
Its robotics business also remains largely under wraps. In July, Samsung established the Robotics Experience division, a robotics unit, but the company has yet to demonstrate what it can deliver in the robotics market.
Internally, disputes over performance bonuses have effectively divided Samsung Electronics into semiconductor and non-semiconductor companies, fueling conflicts between labor unions representing employees in different divisions.
“To turn the semiconductor boom as a sustainable growth, Samsung Electronics still faces daunting tasks to secure future growth drivers through technology investments and acquisitions,” an industry official said. “Also, achieving organizational unity as a single company remains as a critical challenge.”