As Huawei Pushback Grows, Samsung Will Appoint New 5G Network Chief

0

Kim Young-ky, president of Samsung Electronics’ networks business, will step down and take on an adviser role at the company, according to people familiar with the matter.

Kim Young-ky, president of Samsung Electronics’ networks business, will step down and take on an adviser role at the company, according to people familiar with the matter.


Photo:

chandan khanna/Agence France-Presse/Getty Images

SEOUL—

Samsung Electronics
Co.

is replacing the head of its unit that provides next-generation 5G equipment, according to people familiar with the matter, a shake-up atop a key business looking to rapidly grow sales as global pushback builds against market leader Huawei Technologies Co.

Kim Young-ky, president of Samsung’s networks business, will step down and assume an adviser role at the company, the people said. His replacement hasn’t yet been decided, the people said. A strong contender under consideration is Cheun Kyung-whoon, a networks executive vice president, who has worked on the company’s 5G research and development, the people said.

The Suwon, South Korea-based company will announce the move next week as part of its annual year-end personnel reshuffling, the people said. The decision isn’t final, and plans for Samsung’s annual shake-ups have been reversed before.

“No decision has been made regarding personnel changes,” a Samsung spokesman said.

Chinese telecom giant Huawei has long caused tension between Washington and Beijing. WSJ’s Shelby Holliday explains what the company does and why it’s significant. (Photo: Aly Song/Reuters)

Samsung is the world’s largest maker of smartphones and semiconductors. It has a target of securing a 20% market share of 5G equipment by 2020, believing its experience making handsets, network equipment and semiconductors could give it a unique edge.

For now, Samsung is a small player. It represented just 4.4% of the global mobile-infrastructure market in the first six months of 2018, according to market researcher Dell’Oro. That puts it well behind network-equipment leaders Huawei and

Ericsson

AB, which controlled 30.4% and 20.3% of the market, respectively, in the same period.

Mr. Kim’s successor will be tasked with dramatically boosting 5G mobile-network sales, as the U.S. government pushes wireless and internet providers in allied countries to rethink their business ties with China’s Huawei and

ZTE
Corp.

, due to what it says are cybersecurity threats.

This week,

BT Group

PLC, Britain’s largest wireless carrier by number of subscribers, said it is removing Huawei equipment from the core of its network for transferring calls and internet traffic.

A Huawei spokesman said BT has long used several equipment suppliers and was simply working to upgrade dated technology. “This is a normal and expected activity, which we understand and fully support.” The spokesman added Huawei has “never had a cybersecurity-related incident.” Both Huawei and ZTE have denied they pose a security risk.

In the past year, Washington has taken steps to restrict Huawei’s business on American soil and, more recently, launched an extraordinary international outreach campaign to persuade allied countries to enact similar curbs.

Earlier this month, Canadian authorities arrested Meng Wanzhou—Huawei’s chief financial officer and the daughter of founder Ren Zhengfei—following a U.S. extradition request, a move likely to heighten scrutiny of business dealings with Huawei in U.S.-allied countries.

Mr. Kim, 56 years old, has led Samsung’s networks business since December 2010. His departure signals a desire by the company to install fresh leadership for a 5G era that is expected to enable self-driving cars and allow doctors to perform complex surgeries remotely, according to people familiar with the matter.

Mr. Kim didn’t immediately respond to a request for comment.

Under Mr. Kim’s leadership, Samsung notched up some key advances in the past year.

In May, it became the first company to win U.S. Federal Communications Commission approval for a 5G home router, the small boxes that sit inside consumers’ homes, receiving the signal and translating it into Wi-Fi. That was an important victory for Samsung because carriers such as

Verizon Communications
Inc.

want to first commercialize 5G by using cellular antennas to beam high-speed internet into consumers’ homes.

Samsung is one of several infrastructure suppliers working with

AT&T
Inc.

on the U.S. carrier’s rollouts of its 5G mobile network and fixed wireless internet.

Samsung is working with Verizon and AT&T to launch 5G smartphones next year, the companies said this week. The Wall Street Journal reported last month that Samsung’s 5G handset—code-named “Beyond X”—would boast a 6.7-inch screen and six cameras.

Write to Timothy W. Martin at timothy.martin@wsj.com