Samsung Chief Executive, Kwon Oh-hyun, has been today released a statement about the business and the difficulties it faces. His comments follow a difficult period for Samsung because of the failed release of the Galaxy Note 7 flagship device, which was originally released in August 2016. Shortly after the initial release, reports started coming in that the Galaxy Note 7 was catching fire or exploding, initially when on charge but after a time, on or off the charger. Samsung recalled the device, citing that an internal short circuit in the battery was causing an issue, which was resulting in a "thermal runaway" situation. In other words, the separate components of the rechargeable battery were mixing in place and causing a chemical thermal reaction. Unfortunately, a few weeks after the recalled devices were put in service, reports started arriving of the new, post-recall device catching fire including one famous case where an American airliner was grounded and evacuated. Samsung subsequently stopped the manufacturing of the Galaxy Note 7, recalled all devices in circulation and are working on a number of promotions to encourage customers to stick with Samsung-branded smartphones, such as an inexpensive upgrade to the Samsung Galaxy S8 shortly after its release next year.
In his remarks, Mr. Kwon explained that the business has "a long history of overcoming crises" and that it should "use this crisis as a chance to make another leap by re-examining and thoroughly improving how we work, how we think about innovation and our perspective of our customers." Although Mr. Kwon did not directly tackle the issue of the Galaxy Note 7 battery problem, he did ask that Samsung employees need to assess their work to ask themselves if they have been complacent. The company has promised to bounce back from the Galaxy Note 7 issue, which has already had a material impact on third quarter business and profits.
Fortunately for Samsung, the company manufacture much more than smartphones. The business has a very successful display business and has at least 95% of the OLED market. It also has a successful semiconductor arm with interests in both the mobile chipset and memory module markets. Samsung has an eighteen month technological advantage compared with the majority of DRAM competitors and is set to reduce the manufacturing size of its chips in the coming two years, leaving its rivals scrabbling to catch up. Mr. Kwon is adding his voice to the questions asked about Samsung's internal quality control systems and processes and the worry within the business is that the issues surrounding the Galaxy Note 7 battery problems could run considerably deeper.