Samsung has announced the imminent departure of its CEO even as the company said it expected to post record profits of nearly $13 billion in the third quarter.
In a shocking announcement, Kwon Oh-hyun said he will step down as the South Korean tech giant’s vice chairman and CEO of Samsung Display. Kwon also said he won’t seek reelection as a member of the company’s board of directors once his term ends in March.
The news follows the August conviction of former Samsung chief Jay Y. Lee, who was sentenced to five years in jail for bribery and other charges. Lee’s conviction was widely seen as a pivotal moment for South Korea, whose economy has been dominated for decades by family-operated corporations.
“It is something I had been thinking long and hard about for quite some time,” Kwon said in a Samsung announcement. “As we are confronted with unprecedented crisis inside out, I believe that time has now come for the company to start anew, with a new spirit and young leadership to better respond to challenges arising from the rapidly changing IT industry.”
Amazingly, Kwon’s move was announced nearly simultaneously with Samsung’s third-quarter guidance, which predicted a record operating profit due largely to its business of producing chips and other components for mobile devices—a division that Kwon helped build. Semiconductors accounted for $7.2 billion during the quarter, Reuters reported, marking the company’s top-performing business.
“There are no words to describe how proud I am that we built together one of the most valuable companies in the world,” Kwon said in an email to Samsung employees. “We have come a long way to create a company that truly changes how people live, work and communicate with each other. But now the company needs a new leader more than ever and it is time for me to move to the next chapter of my life.”
Samsung posted a record $9.6 billion in net income in the second quarter of 2017, easily beating analysts’ estimates, due primarily to strong demand for its Galaxy S8 smartphone and demand for semiconductors. Sales increased 20% year over year during the quarter.