Samsung named the replacement for vice chairman and CEO Kwon Oh-hyun, who earlier this month said he will step down, along with two other division chiefs in a management shake-up announced after reporting record Q3 earnings.

Kim Ki-nam, president of the semiconductor business, will take over from Kwon in March 2018. Kim will also head the device unit.

In other management charges, Koh Dong-jin will replace Shin Jong-kyun as president and head of the IT and mobile communications division, while Kim Hyun-suk, currently head of the visual display unit, will take over from Yoon Boo-keun as president and head of the consumer electronics business.

Samsung also said it will separate the chairman of the board and CEO roles.

The company announced in its Q3 earning calls it will double its dividend payments in 2018 to KRW9.6 trillion ($8.4 billion) and maintain the level for three years – paying out nearly KRW29 trillion between 2018 and 2020. It also said 2017 capex would increase 81 per cent to KRW46.2 trillion to fund the expansion of chip production facilities.

Mobile growth
The mobile communications business reported a 23 per cent year-on-year increase in turnover to KRW27.2 trillion in Q3 2017, with operating revenue rising 3.2 per cent to KRW2.29 trillion.

Lee Yeong-tae, VP of mobile communicatons, said smartphone shipments increased quarter-on-quarter, driven by the launch of the Note 8 and strong sales of the new J series, but revenue and earnings declined sequentially due to the higher share of mass-market smartphone sales.

He said it is seeing strong demand for the Note 8 in almost all regions.

Q3 handset shipments reached 97 million units, while tablet shipments hit 6 million. Its blended handset ASP was about $210, with smartphones accounting for about 85 per cent of total handset shipments.

The IT and mobile communications network business reported a drop in revenue and operating profit quarter-on-quarter due to a decline in LTE investment from major overseas customers.

Looking to Q4, Lee said it expects competition to get harder in the premium smartphone market due to the release of new smartphone models. With the global launch of the Note 8 and increased marketing efforts, it aims to increase the poportion of flagship model sales and improve the product mix, he said: “Through these efforts we will maintain our revenue and profit at a similar level to the previous quarter.”

However, the company expects handset shipments to decrease quarter-on-quarter in Q4 as global smartphone sales are likely to decline. Blended handset ASP is forcast to increase.

Its outlook for 2018 is more positive, with Lee predicting a recovery in smartphone growth due to strong replacement demand across all device tiers.

“It seems the challenges in our business will increase due increased competition and higher material costs,” he noted.

On a group level, the company reported a Q3 net profit of KRW11.1 trillion, more than double the KRW4.54 trillion in Q3 2016. Revenue increased 29.8 per cent to KRW62 trillion, with memory chip sales increasing 65 per cent year-on-year to KRW16.3 trillion.

The company two weeks ago predicted Q3 operating profit would nearly triple to KRW14.5 trillion on the back of brisk demand for semiconductors.