Samsung Electronics' de factor leader Lee Jay-yong. (Photos: Samsung Electronics)

Samsung Electronics logged its best operating profit in 11 quarters in the second quarter of this year on the back of a boom of the semiconductor business, but despite the earning surprise the electronics giant faced a declining share price.

Samsung posted an earnings surprise in Q2 in which the company posted 63.671.6 trillion won in sales and 12.566.7 trillion won in operating profit. The Q2 operating profit was the best since the third quarter of 2018, when the company chalked up 17.57 trillion won.

The public spotlight is on whether Samsung de factor leader Lee Jay-yong will repeat its “Memory Legend” in the non-memory sector on the heels of the late chairman Lee Kun-hee, who catapulted the company to a global memory chip maker.

Samsung’s ascent to the global standing traced to the late Lee’s “Frankfurt declaration.”

The late Lee, who took office chairman in 1987, convened a meeting of some 200 executives in the German city in 1993 to enter an emergency management mode. The well coined catchphrase of the declaration was “change everything except your wife and children.”

As Samsung Electronics is facing fierce completion from its archrivals, Lee, now back to management, has many tasks on his shoulders.

Lee, now an unregistered director of Samsung Electronics, is expected to launch his on-site management in earnest. He is most likely to tour Samsung Biologics headquarters in Songdo, Incheon, in which a consignment production of a COVID-19 vaccine is to be launched or a plant in Pyeongtaek, Gyeonggi-do, which is up for massive semiconductor facility investments.

Some business analysts said Lee should have been granted amnesty so that he can execute responsibly management.

Samsung is fine-tuning manpower allocation for businesses like smartphones and home appliances, but the semiconductor business will have more manpower.

Even though the scope is not known, the mobile business, under the umbrella of IT and Mobile Division, and the home appliance business, under the Consumer Electronics Division, are conducting voluntary retirements.

On the other hand, the semiconductor business, in which competition is heating up, is aggressively securing manpower.

Former Vice Chairman Lee headed for his office in Seocho-dong, Seoul, rather than going to his home, after he was released on parole on Aug. 13. At his office he cleared up a heap of belated business tasks.

A view of Samsung Electronics’ Seocho Office Building in Seoul.

The move may be seen as Vice Chairman Lee’s virtual return to management. Heads of Samsung Electronics’ businesses were busy preparing for their briefing for Lee, which was expected to occur soon.

Among the urgent tasks on hand are Lee’s pending approval of Samsung Electronics’ selection of a site for a new foundry plant, and Samsung SDI’s construction of a new battery plant, both in the United States.

Samsung Biologics’ consignment production of a vaccine for the COVID-19 pandemic is another urgent issue to be tackled by Vice Chairman Lee.

Samsung Electronics had already drawn up massive investment plans, including “Vision 2030,” to nurture the company to become a global No. 1 maker the non-memory sector.

Looking at Samsung Electronics’ 8.2 trillion won in Q2 operating profit, the company saw the processor chipset and foundry business account for between 200 billion won and 300 billion won, less than 2 percent of the total. On the contrary, the memory business chalked up 6.9 trillion won, or over 80 percent of the profit.

Samsung Electronics made a strong showing in the smaller mobile processor market, compared to Intel of the United States, which has dominated the larger and expensive mobile processor market.

In the foundry segment, Samsung Electronics ranked second with an 18 percent share, following TSMC of Taiwan, which had a 56 percent share in the first quarter of the year.

Lee’s return to management is expected to give a renewed push to plans for massive investments to make Samsung Electronics a global system semiconductor ‘legend.’ Samsung Electronics is expected to channel over 371 trillion won into the semiconductor sector over the next decade.

Samsung Electronics has become the industry’s first company to introduce the Exynos W920, a next-generation, wearable 5-nano processor.

The 2030 Vision calls for pouring 171 trillion won into the system semiconductor segment, with the goal of making Samsung 1st in the global foundry market.

Samsung Electronics, already a memory chip legend, also has plans to invest over 20 trillion won every year in the memory sector.

Samsung Electronics is expected to come up with a detailed plan to invest $17 billion (about 19.4 trillion won) into a second U.S. foundry plant, which has been put on hold. Samsung Electronics is finding itself facing greater challenges from its rivals.

Intel has announced a plan to push the business in earnest, while TSMC has already come up with a plan to pour $100 billion into the foundry sector.

Vice Chairman Lee Jay-yong of Samsung Electronics looks into foundry production facilities of the 2nd Pyeongtaek Plant in January.

Even though Lee attempted to nurture the sector, Samsung Electronics suffered a setback due to implications related to his imprisonment. U.S. telecom service provider Verizon, which struck an 8 trillion won 5G network deal with Samsung last year, has chosen Ericsson of Sweden as its business partner instead of Samsung this year.

The government and the ruling party asked for Vice Chairman Lee to play a part in securing vaccines against the pandemic, in which Korea is struggling with insufficient supply, for herd immunity.

Lee was arrested in January when he was preparing for a trip to secure vaccines. Last year, he helped pave the way for the early introduction of Pfizer’s vaccine. Lee’s parole, not pardon, does not give him much leeway in making overseas trips.

A whole view of Samsung Electronics’ Pyeongtaek Plant.