Samsung Electronics is all set to overtake its rival Apple Inc. and become the most profitable company on the face of the Earth thanks to its intensive investments in the semiconductor business which has seen a massive growth over the last few years with various companies opting to invest in memory chips for maintaining and expanding their data centers. Samsung reported an influx of 60 trillion won ($51 billion) in estimated revenues and 14 trillion won ( $12 billion) in operating profits in the second quarter of 2017, making it the highest gross profit the company has ever made in its 79-year history. Some analysts are also predicting Samsung’s net profit to generate a similar rate of gross profit, if not greater, with the release of Galaxy Note 8. A well-received Galaxy Note 8 may just be the push Samsung needs to surpass Apple and become the most profitable company in the world.
Although what analysts seem to be missing out on, which has recently been pointed out by Samsung executives, is the state of its incapacitated leadership. With Samsung Chairman Lee Kun-hee in a comatose state since late 2014 and Vice Chairman Lee Jae-yong fighting charges of bribery, perjury, and embezzlement involving former President Park Geun-hye, these are trying times for the South Korean conglomerate who has been fighting hard to revamp its image in the country and worldwide. While the company is likely to install someone from outside its founding family to take over the everyday operations, Samsung’s complex structure and hierarchical mindset do not allow any outsider to command the same authority as Lee Kun-hee and Park Geun-hye.
Samsung officials have time and again accredited the current success of the company to bold investments made three to five years ago by its owners at a time when few could see the reason in investing in a semiconductor business. The semiconductor industry is considered to be a very competitive one with players like Qualcomm, Intel, AMD, and MediaTek controlling a commanding share of the business, leaving Samsung to focus on mobile devices and data center-oriented chip systems. The semiconductor business also received a boost thanks to the cryptocurrency mining trend which emerged a while ago. The current lack of leadership at the highest level will also make it difficult for making such bold investments in the near future as Chinese and other competitors start doing more to challenge Samsung’s mobile dominance, some of the firm’s executives believe. Samsung’s future may now largely depend on the fate of its Vice Chairman whose legal battle will be concluded by late August.