Samsung Electronics' four businesses will now operate under two umbrellas: Device Solutions, which includes memory chips and LCDs; and Digital Communications, which will house the company's consumer appliances and mobile phones business.

The electronics company had previously operated separate divisions for chips, liquid crystal displays, cell phones, and consumer electronics.

The move comes as the company faces a slumping economy that's leading to decreased demand and prices for semiconductors and flat screens. Samsung's chips division has been dragging down the company, and for the third quarter of 2008 the company saw its net profits decline 44 per cent from the previous year.

The cell phone and digital media divisions have been gaining traction though, and both offer high profit margins for the company. The company is now the second-largest cell phone manufacturer behind Nokia, and its consumer electronics products are rapidly gaining market share.

Essentially the company is consolidating between money spinners and non profit making divisions.

Samsung Electronics is forecast to post a 2008 fourth-quarter operating loss of 400 billion won ($294.6 million) and 2009 first-quarter operating loss of 600 billion won ($441.8 million)

Management reshuffle
Current chief executive officer Lee Yoon-woo will assume the additional role of overseeing the combined semiconductor and liquid crystal display (LCD) units, two areas that face the biggest challenges in the ongoing industry slump.

Choi Gee-sung, currently head of the telecommunications business, will oversee the new media and telecom division which includes mobile phones, TVs and other electronic products.

Korea's biggest conglomerate replaced 25 presidents and vice chairmen, its first major executive reshuffle since the resignation of former chairman Lee Kun-hee last year.

Lee, who had headed Samsung Group for two decades, stepped down in April in the wake of a corruption scandal that led to his indictment on tax evasion and breach of trust charges.

The larger-than-expected reshuffle forced the group's old vice chairmen and presidents out and younger executives were promoted to fill their posts.

"The sweeping reshuffle aims to invigorate the group's organization following the probe by a special prosecutor. We have also massively recruited young and creative talents," the group said in a statement.

It said all of its top executives aged over 60 were replaced, except for two presidents who were promoted to vice chairman - Kim Jing-wan of Samsung Heavy Industries and Lee Sang-dae of Samsung C&T Corp.

"Age was the biggest criteria in the reshuffle," Yoon Soon-bong, Samsung's chief public relations executive, said at a press briefing.

"The global market is in a crisis and Samsung is also in an extremely difficult situation. We need very challenging and proactive people," he said.

The reshuffle also saw two major Samsung pioneers leave top management. Hwang Chang-gyu, who led Samsung's chip unit from 2000 to its most prosperous years, and Lee Ki-tae, who established Samsung's mobile phone brand as a global name, are leaving the management frontline, according to Samsung Group.

A new generation of leaders at Samsung also raises hopes among shareholder activists that it will embrace international business practices.

After last year's tax scandal, Samsung disbanded its powerful Strategic Planning Office, which Korean prosecutors alleged arranged illegal business deals to benefit the Lee family at the expense of other shareholders (See: Samsung announces major management revamp) Prosecutors also said the Lees owned more than $4 billion worth of securities in accounts held in other people's names to avoid paying hefty taxes.