[CEO Rivals] Both Suffer Losses of 2,000 Shares Each... Jang Deokhyun and Jeong Cheoldong Presidents Side by Side

Samsung Electro-Mechanics and LG Innotek CEOs Face Off

[Asia Economy Reporters Sunmi Park and Pyeonghwa Kim] Samsung Electro-Mechanics and LG Innotek, two leading domestic electronic component companies, are 'look-alike' competitors. Although their business areas differ in scale, the two companies are quite similar and both announced 'shock'-level earnings in the fourth quarter of last year. The CEOs of both companies, each holding 2,000 shares of their own company stock, share the same hope that the first quarter will mark the bottom of the market conditions.

Jung Cheol-dong, CEO of LG Innotek, purchased 1,000 shares of company stock at the end of last year. He bought 500 shares each at 252,500 KRW and 253,500 KRW per share, totaling approximately 253 million KRW. Earlier, in April last year, Jung also bought 1,000 shares worth about 377 million KRW. In total, he took responsibility for 2,000 shares. Based on LG Innotek's closing price of 280,000 KRW on the 6th, this translates to a simple loss of about 70 million KRW.

Jang Deok-hyun, CEO of Samsung Electro-Mechanics, is in a similar situation. He also holds 2,000 shares of Samsung Electro-Mechanics stock. In February last year, the year after his appointment, he purchased 2,000 shares at 172,000 KRW per share, investing a total of 344 million KRW. Considering that the stock price dropped to the 110,000 KRW range after his purchase, he essentially bought at the market peak. Fortunately, the stock price has since risen to 146,000 KRW (closing price on the 6th). Still, the loss exceeds 50 million KRW.

Both CEOs purchased their company shares as a matter of responsible management. It is also an expression of confidence that their companies will perform better in the future. Both CEOs share the common denominator of 'semiconductors' and lead the component industry. They both graduated in electronic engineering and have worked extensively in the semiconductor field. Given the strong linkage between semiconductors and electronic components, their careers are well-suited to generating synergy. Recently, the two companies have competed in the next-generation semiconductor substrate market, specifically in flip-chip ball grid array (FC-BGA), which is closely related to the backgrounds of their leaders.

Semiconductor Experts Majoring in Electronic Engineering

CEO Jang graduated with bachelor's and master's degrees in electronic engineering from Seoul National University and earned a doctorate from the University of Florida in the United States before joining Samsung Electronics. He attended the same school and department as former Samsung Electronics president Lim Hyung-kyu, a senior who laid the foundation for Samsung Electronics' memory business. At Samsung Electronics, Jang worked as an engineer focusing on memory and system semiconductors development. As a semiconductor expert, he has declared his intention to lead the era of system-on-substrate (SoS) to enhance semiconductor performance at Samsung Electro-Mechanics, the nation's top semiconductor substrate company, thereby setting the direction for semiconductor substrates.

CEO Jung is also a 'look-alike' competitor with a semiconductor career and an electronic engineering background. After earning a bachelor's degree from Kyungpook National University and a master's degree from Chungbuk National University, he joined LG Semiconductor in 1984. In 2004, he moved to LG Philips LCD (now LG Display), serving as executive director of production technology, senior executive director of the production technology center, and vice president and chief production officer. He later became president of LG Chem's Information & Electronic Materials Business Division. Since 2019, Jung has been CEO of LG Innotek. His confident leadership of new business projects aiming to become number one in the semiconductor substrate market is supported by his solid semiconductor experience.

Q4 Sales Diverged Depending on Business Proportion

There are differences even between these 'look-alike' competing component companies. Samsung Electro-Mechanics, led by CEO Jang, has its largest portion of total sales from the component business, which is more dependent on China than other divisions. It was hit directly by the decline in IT device demand in China. As a result, the component division's sales in the fourth quarter of last year fell by 29% compared to the previous year, dragging down Samsung Electro-Mechanics' overall performance. The component division handles Samsung Electro-Mechanics' core products such as multilayer ceramic capacitors (MLCC), inductors, and chip resistors.

On the other hand, LG Innotek, led by CEO Jung, has the optical solutions division, which produces camera modules, as its largest revenue source. Sales increased by 15% due to increased supply of high-performance camera modules for new smartphone models from customers. Although Samsung Electro-Mechanics and LG Innotek are similar electronic component companies whose profitability shrank equally in the fourth quarter, LG Innotek's performance shock was less severe compared to Samsung Electro-Mechanics. However, in the semiconductor substrate business, which both companies have entered, Samsung Electro-Mechanics holds a superior position.

The ways the two CEOs spend their time outside work are quite different. CEO Jang enjoys dynamic activities such as horseback riding and hiking. He especially likes surfing and often visits Yangyang, known as the surfing mecca of Korea, during summer. Reflecting his adventurous personality, he is also known as an 'early adopter' in the IT field. In contrast, the more reserved CEO Jung is passionate about music, even building vacuum tube speakers himself. He also has a strong interest in astrophotography.

Both CEOs share the same business goal: to grow their companies into world-class leaders. CEO Jang aims to build a 'top-tier tech component company,' while CEO Jung focuses on making LG Innotek a 'global number one materials and components company.' Expanding the automotive electronics business is a common challenge both CEOs are dedicated to achieving their business goals. CEO Jang announced plans to focus on the automotive electronics business at CES 2023, the world's largest electronics and IT exhibition. CEO Jung also set up a public booth for the first time at CES and plans to actively expand the automotive electronics components business starting from this event.

This content was produced with the assistance of AI translation services.