Samsung staff hit by memory crisis

A senior executive at Samsung Electronics has been given the task of sorting out the mess left after the group?s near acquisition of AST.

At the same time, it emerged that massive bloodletting has followed the decision by the South Korean government to drastically reduce DRam memory production.

More than 30 senior executives are carrying the can for making memory that doesn?t pay for itself.

KH Kim, chief executive of Samsung Electronics, has left that division?s head office to sort out problems in the US, according to a source at the group.

Kim is one of Samsung?s new guard, which successfully toppled the old order at the Korean conglomerate four years ago.

A source said: ?I wouldn?t call it a promotion. He?s been sent to sort out the AST mess. AST has been a financial hole for the group.?

Corporate representatives in New York and London refused to confirm the moves in DRam plants in Korea.

A source said the company had spent billions of dollars in the past few years to create extra production.

However, he confirmed that Samsung is over-exposed in the memory market. A combination of falling prices, coupled with an ambitious move by head office to capture a bigger share of the market, has brought it to the point of crisis.

This explained the loss of the 33 senior executives and many more middle and junior managers in Seoul and Pusan, the source revealed.

Samsung also has to adapt to new demands for Simm memory modules. For the past eight months, 8Mb Simms have become less popular as PC manufacturers moved to 16Mb variants.

But now OEMs are looking for 32Mb Simms, and Samsung has to adjust its manufacturing to keep pace with the rapid change in demand.