By Cho Jin-seo
Staff Reporter
Samsung Group's strategic planning office is launching an in-depth inspection to restructure the semiconductor business of Samsung Electronics for the first time since the Asian financial crisis.
The move is a reflection of growing worries that Samsung's chip business is becoming lethargic amid stiff market competition, and is struggling to find a breakthrough by itself. It is also part of the firm's ongoing restructuring efforts this year in line with similar actions at its telecommunications division.
Samsung Electronics said the inspection will start this week and will last for about six weeks. It said the move was planned ahead and is not related to the recent power outage the company suffered a week earlier.
``The inspection is an effort to search for Samsung's next-generation growth engines and to retain our leadership in the semiconductor industry. It is a regular inspection we have every four or five years,'' a company spokesperson said.
Samsung is the world's largest memory chip maker possessing around 30 percent of the computer memory chip (DRAM) market and 40 percent of the NAND flash chip market. But the firm's profit fell by 41 percent in the second quarter of the year from a year earlier due to the falling price of memory chips.
Alarm bells rang a week ago when six manufacturing lines were hit by a sudden power outage. Operations resumed after 22 hours but the accident damaged Samsung's reputation as one of the most stable and reliable firms in South Korea.
The firm said it recently completed a two-month inspection of its telecommunications business. According to media reports, the strategic planning office, the conglomerate headquarters, ordered the telecom division to remove or merge its product planning and marketing teams which are spread all over the organization. It also advised the division to expand the workforce in the global marketing team.
To streamline its organization, Samsung Electronics has received applications for an early retirement program from its executives and mid-level managers. According to insiders, the company pays a year's salary in compensation though the amount varies case by case.
``It is officially known as a voluntary early retirement program but not all employees are eligible for it. Only people who were notified by the company could apply for it,'' a manager at the company's R&D headquarters in Suwon said. ``Many of them were high school graduates who have climbed the corporate ladder step by step over a long time.''
Cost-cutting efforts have been implemented everywhere, he said.
``Elevator lights have been dimmed. Every other light in toilets has been turned off,'' said the manager who works at the firm's cutting-edge R4 research lab in Suwon.