A senior executive at Samsung Electronics has the task of sorting out the mess left after the group?s near-acquisition of AST.
At the same time it emerged that massive bloodletting has followed the decision by the South Korean government to drastically reduce Dram memory production, with over 33 senior executives carrying the can for making memory that doesn?t pay for itself.
KH Kim, chief executive of Samsung Electronics, has left that division?s head office to sort out problems in the US, according to a source at the group. He is a member of Samsung?s new guard, which successfully toppled the old order at the major conglomerate four years ago.
A source said: ?I wouldn?t call it a promotion. He?s been sent to sort out the AST mess. AST has been a financial hole for the group.?
Corporate spokespeople in New York and London refused to confirm the moves in the Dram plants in South Korea. A source said that the company had spent billions of dollars in the past few years to create extra production.
However, he confirmed that the big issue for Samsung is that memory is the company?s bread and butter. A combination of falling prices coupled with an ambitious move by head office to capture a bigger share of the market has brought it to the point of crisis. That explained the loss of the 33 senior executives and many more middle and junior managers in Seoul and Pusan, he said.
Samsung also has to adapt to new demands for Simm memory modules. For the past eight months, 8Mbit Simms have become less popular as PC manufacturers moved to a 16Mbit model. But now OEMs are looking for 32Mbit Simms and Samsung has to adjust its manufacturing to keep pace with the rapid change. The Samsung Group results come at the end of March.
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