Samsung Electronics said Tuesday it has appointed Jun Young-hyun as the new head of its semiconductor business in an apparent move to strengthen its market position amid fiercer competition in burgeoning artificial intelligence chips.

Kyung Kye-hyun, who previously held the position, has been tapped to lead the company's future business planning team.

The announcement comes as Samsung struggles to compete with rivals in advanced chips such as SK hynix, the market leader in producing high bandwidth memory, or HBM, chips that are crucial for generative AI tools.

Samsung Electronics' device solutions division in charge of the chip business posted its worst performance last year, with a deficit of approximately 15 trillion won ($11 billion).

Earlier this year at a general shareholders’ meeting and press conference, Kyung admitted that SK hynix beat Samsung in the HBM sector and stressed the importance of Samsung regaining competitiveness through radical reform.

Some industry sources say that Samsung took disciplinary action against Kyung because it had difficulties supplying Nvidia, its key buyer of HBM chips. Currently, SK hynix is the sole supplier of HBM chips to Nvidia, which controls 90 percent of the AI ​​semiconductor market.

A Samsung Electronics official drew a line saying that the latest reshuffle had nothing to do with penalizing those affected, but a preemptive measure to fortify its chip business' future competitiveness under the uncertain global business environment.

“Jun has a lot of experience as he was in charge of the semiconductor and battery sectors and led a lot of growth in those businesses. We believe it would be a good chance to take advantage of that rich management experience and overcome the crisis preemptively and secure the competitiveness gap again,” the official said.

As a Korea Advanced Institute of Science and Technology graduate with master's and doctorate degrees in electrical engineering, Jun joined Samsung Electronics in 2000 in its memory business division.

The 63-year-old has extensive experience in the semiconductor and battery sectors.

He solidified his position by serving as the head of the design team in 2006 and the head of the DRAM development department in 2009, and served as the president of the division for three years starting in 2014.

During his time as the head of the memory division, Jun led the development of fine processes below 20 nanometers. In 2012, Samsung's chip business experienced difficulties as its annual operating profit fell to around 4 trillion won, but he attributed the operating profit recovery to around 13 trillion won, and the company ranked No. 1 in the world in both DRAM and NAND flash.

He was also appointed CEO of the company's battery-making affiliate, Samsung SDI, in 2017 and served the term for five years. At that time, the company was logging a loss due to various difficulties including the Galaxy Note 7 battery ignition issue and the sluggish smartphone market.

Jun decided to focus on improving Samsung SDI’s business structure by shifting its business to medium-to-large batteries, such as energy storage systems and those for automobiles, which led to the company's success in turning a profit in the same year he took office.

As a result, he was retained as CEO of Samsung SDI in the regular executive personnel reshuffle in 2021, breaking the 60-year-old retirement rule that had been applied uniformly. Samsung had maintained a personnel philosophy that senior executives above the age of 60, including those at the CEO level, would retreat to second lines, but he continued his term in an “exceptional” manner.

Last year, Jun returned to Samsung Electronics to lead the future business planning team, which was newly established to find the company’s new growth drivers.

According to sources, Jun has an outgoing personality and enjoys informal conversation regardless of position. He is also seen as a perfectionist who attaches importance to the field and demands meticulous and reliable work in everything.