The chief executive of Samsung Electronics has resigned, with a warning that the South Korean technology giant is in the throes of an “unprecedented crisis”.
Kwon Oh-hyun announced his decision to step down on Friday, when the company estimated that its quarterly profits from July to September will reach a record high of 14.5 trillion won (£9.6bn).
Although Samsung is reaping the rewards of a continued boom in the memory chip industry, it is also struggling to overcome a bribery scandal.
The company’s heir and de facto head, Lee Jae-yong, was jailed for five years in August after being convicted of offering bribes to South Korea’s former president Park Geun-hye.
Image: Lee is appealing his five-year sentence and maintains he is innocent
Mr Kwon – affectionately known as “Mr Chip” – has been with the company for 32 years, and chief executive of Samsung’s hugely successful components business since 2012.
In a statement, the 65-year-old said: “Fortunately, the company is now producing best-ever results but this is merely a fruit of decisions and investment made in the past.
“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 in the rapidly changing IT industry.”
Samsung has two other chief executives who oversee its mobile phone business and home appliance divisions.
In August, the smartphone giant looked to leave its exploding phone disaster behind with the launch of its new Galaxy Note 8.
It was forced to suspend sales of its Galaxy Note 7 last year after some caught fire when the battery exploded.
Image: Samsung Galaxy Note 7 had battery problems that caused them to self-combust
Mr Kwon will remain on the board of Samsung Electronics until March 2018, and his resignation could widen a leadership vacuum at the company.
Following news of Mr Kwon’s departure, one analyst described the timing of his announcement as “nonsensical”.
Prices of memory chips have skyrocketed globally due to the growing use of social media, mobile data, cloud computing and the emerging internet of things, which have combined to leave supplies tight.
In the second quarter, Samsung dethroned Intel Corp as the world’s biggest chip manufacturer.