By Kim Yoo-chul
Samsung Electronics Chairman Lee Kun-hee has officially refused to take the top position at the Federation of Korean Industries (FKI), the nation's most influential business lobby.
Lee has been pressed to head the FKI since former Chairman Cho Suck-rai stepped down in early July due to health reasons.
"I am not in good health. In addition, I am swamped with work," Lee told reporters at Gimpo International Airport before flying to Japan, Friday.
It is the first time that the chairman has officially shown his intention not to lead the business lobby.
Lee was on his way to Japan to receive an honorary law doctorate from Waseda University in Tokyo on September 20.
The chairman said that chief executives will meet with the heads of its major subcontractors at a workshop slated for later this month.
"Samsung will add to its efforts to boost better relationships with our suppliers. The key point is how low-ranking employees can feel better about the partnerships," Lee said.
Last week during a meeting with President Lee Myung-bak, he said Samsung will expand investment and create more jobs to help combat social polarization.
The chairman has confirmed higher market worries over the decline of Samsung Electronics' component business _ memory chips and LCDs _ by saying Samsung is forecast to suffer a downturn in the sector for the next full year.
Amid economic uncertainties, chip and LCD inventories are increasing, while prices for the components have also been falling, weighing on Samsung’s cash balance in the second half of the year.
"I am not sure about that, however, I am slightly worried for the next year (about difficulties in the chip and LCD businesses)," the chairman said.
"It is likely that Samsung Electronics may lose its competitive edge in the component business amid the expected downturn," he added.
Separately, Samsung's chief executive Choi Gee-sung told The Korea Times that he has been warned about falling profits in its traditionally-strong units throughout 2011.
"Samsung Electronics will face big challenges to secure our bottom line in chips and LCDs, next year," Choi told the English-language daily.
In the second quarter, 3.82 trillion won or 75 percent of its total quarterly operating profit of 5.01 trillion won came from chips and flat-screens, Samsung said in a regulatory filing to the Korea Exchange (KRX).
Samsung is the world's top vendor for LCD panels used for everything from handsets and monitors to televisions, while it is the industry’s biggest supplier of memory chips.
Market analysts expect the consolidated operating profit for Samsung Electronics in the third quarter to be cut by some 10 percent to around 4.5 trillion won amid the continued bearish mood in the sector.
Memory chips and LCDs are highly cyclical and volatile upon economic situations as consumers usually do not upgrade their digital devices or buy new ones when the economy is struggling.