South Korean electronics firm Samsung has announced that it will split its operations into two divisions: chip and display units, and telecoms and media.
According to industry analysts, the move indicates that Samsung will spend more time concentrating on productivity and efficiency than production growth and investment - a strategy that could see it in a better position to weather the current economic downturn. Under the new arrangement, Samsung's current CEO, Lee Yoon-woo will oversee its semiconductor and liquid crystal display (LCD) unit.
Choi Gee-sung, the existing head of telecommunications business, will head up the new telecom and media division, which will include mobile phones, televisions and other electronic products. At the moment, Samsung is the world's number one brand in the television business, and ranks second behind Finnish leaders Nokia for global mobile phone market share.
However, it is facing emerging challenges, not just from the economy, but from the likes of Japanese technology giant Sony Corp. Last month, Sony announced a dramatic restructuring effort, cutting 16,000 jobs and saving $1.1 billion in annual costs - a move that could benefit the efficiency of its television department and its Sony Ericsson mobile phones division.
Early in 2008, Samsung's American rivals in the mobile handset market, Motorola, announced that it would be spinning off its mobile devices business due to "further financial, tax and legal analysis".
The move saw the company split into three parts - mobile devices, broadband and mobility solutions and home and networks divisions.
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