Subject of Biography: Yun Jong Yong

Pronunciation: (YOON JONG YONG)

Profession: Electronics industry executives; Businesspeople; Executives; Manufacturing executives

Biography from Current Biography International Yearbook (2003) Copyright (c) by The H. W. Wilson Company. All rights reserved. 

"I'm the chaos-maker," Yun Jong Yong, the president and Chief Executive Officer (CEO) of Samsung Electronics, told Andrew Ward for the Financial Times (March 13, 2003). "I have tried to encourage a sense of crisis to drive change. We instilled in management a sense that we could go bankrupt any day." In 1996, when Yun assumed the helm of Samsung Electronics, the division was primarily known manufacturing microchips; its consumer electronics products were regarded as cheaper and lower-quality imitations of such leading brands as Sony and Mitsubishi. But facing a declining demand for microchips and the Asian financial crisis, during which several Asian currencies were devalued, Yun rescued the company from financial ruin by implementing a new corporate philosophy within its ranks and by enhancing its research and development wing. The technological innovations that were the result of such investment has placed the company at the forefront of the digital revolution. "With the digital age, we can catch up with our competitors," Yun told Heidi Brown for Forbes (June 11, 2001). "We were 30 to 40 years behind in the analog age, but in the digital age, the playing field has been leveled."

Yun Jong Yong was born on January 21, 1944 in Yongchun, Korea, part of the southeastern province of Kyungsangpukdo. He credits his curiosity as a young boy for his later interest in the sciences. "I just think I was very curious about everything ever since I was young, and curiosity just leads you to natural science," he told Eric Minton for Industrial Management (July 1, 1999). Although Yun was more interested in studying philosophy, he entered Seoul National University to pursue a degree in electrical engineering (a field often called "electronics"). "Korea was a poor country then, so I knew that if I majored in philosophy I would not have a job," he told Minton. Seoul National University was among the premier schools in Korea, and its electrical engineering program was regarded as top-notch as well.

Upon his graduation from Seoul National University in 1966, with a bachelor's degree in electrical engineering, Yun joined the Samsung Group, one of the more powerful family-run companies (such companies are often called chaebol) in South Korea. Three years later he moved to the fledgling Samsung Electronics Company, a subsidiary of Samsung, where he worked with televisions. In 1977 he was promoted to head of the Tokyo branch and relocated to Japan. Following a string of high-level appointments within Samsung Electronics, in 1988 he was promoted to vice president. The same year he completed a senior executive course at the Massachusetts Institute of Technology's Sloan School. In March 1990 he rose to the position of vice president and representative director of the Consumer Electronics Business Group; he was appointed the group's president two years later. Having secured a reputation as a leader in South Korea's electronics industry, in May 1992 he received the Gold Medal for Contribution to Industry by the South Korean government (he had received the Bronze Medal in November 1990), and was named 1992's most successful manager by the Korea Management Association. At the time Samsung Electronics was investing heavily in research and development. "Producing high-value products with the next generation consumer electronics and improving product images among consumers are our main goals," Yun told Jae-Bok Young for the Christian Science Monitor (October 15, 1992). Yun temporarily left Samsung Electronics in December 1992, to become president and CEO of Samsung Electro-Mechanics. He headed Samsung's Display Devices division for two years, starting in 1993, and he managed its Japan headquarters by late 1995.

By the mid-1990s Samsung Electronics had emerged as the dominant world supplier of the microchips that were used in large computers. These chips are called "dynamic random-access memory chips" (abbreviated as "DRAM chips"), but are also referred to as "semiconductors," or simply "memory chips." DRAM chips supplied 50 percent of the profits of Samsung Electronics in 1995 and provided 35 percent of the total sales of the Samsung parent company. But when a global oversupply of microchips decreased demand, microchip prices fell drastically beginning in 1996. Facing potential disaster, Samsung executives pinned its hopes on its then-inefficient consumer electronics division, which had been neglected in favor of manufacturing microchips. In December 1996 Samsung's chairman, Lee Kun Hee, appointed Yun, who had been praised as a consumer electronics manager, as the new president and CEO of Samsung Electronics with the specific task of restructuring the company.

Yun initially thought that the world's memory chip industry would recover from the previous year's decline, but he also increased funding for research and development of consumer electronics. Still adhering to a mentality of viewing greater market share as an ultimate goal--a common perception in East Asian corporate philosophy (profits are emphasized more in the West)--Yun spoke of plans to hire more workers. As part of an effort to make Samsung a multinational corporation and decrease bureaucracy, he set up regional headquarters in the United States, Europe, and Asia. While these changes were intended to gradually ease the temporary slump of the microchip industry, the Asian financial crisis that hit in late 1997 halted any plans to expand over the next several years. In 1998 the recently-elected South Korean president, Kim Dae-Jong, threatened to cut off Samsung's bank credit if the company could not reduce its debt-- which was about three times its equity. Yun streamlined the company and made costly operations more efficient. He laid off more than one-quarter of the work force, but managed to mollify the labor unions because both factory workers and managers were let go. He pulled the plug on 52 products and removed 45 companies from Samsung Electronics auspices. "The restructuring was painful but necessary," he told Ravi Velloor for the Singapore Straits Times (October 4, 1999). "It is this bitter pill that we were prepared to swallow that has helped put Korea on the road to recovery."

Tackling the inefficiencies of the old Samsung philosophy, Yun introduced cash-flow principles to Samsung Electronics and emphasized profits over market share. One of his innovations was insuring that consumer products were not made for foreign sale before they were ordered. Workers were offered an opportunity to study modern techniques in marketing and productivity through a school set up within Samsung Electronics, and large bonuses were given for outstanding performances. In order to insure that managers were able to access the company at all times, Yun distributed notebook computers and mobile phones to his staff. To combat bureaucracy and reduce costs, he set up a system on his computer that enabled employees to contact him directly with their complaints or ideas.

Moving away from Samsung Electronics' previous dependency on the DRAM market, Yun also focused on building new and high-quality consumer electronics. Early into the recovery process, Yun pinpointed the mobile phone market as an especially lucrative one. Samsung Electronics supplied athletes, staff, and others at the 1998 Winter Olympic Games in Nagano, Japan, and the 2000 Summer Olympic Games in Sydney, Australia, with 25,000 pieces of wireless communications equipment. The South Korean population alone provided a large demand for mobile phones, but Samsung's exposure at the Olympic Games provided a boost to the international reputation of the company's consumer electronics. In 1999 Samsung struck a deal with the cell phone service provider Sprint PCS, through which Sprint would market Samsung-built phones in the United States. Other Samsung products developed at the time were Internet music players and flat-panel liquid crystal displays (LCDs).

Samsung Electronics had more than $259 million in earnings during 1998, almost tripling the results of the previous year. By implementing his changes, Yun paid off the company's $4.7 billion debt, and Samsung's share price on the Korean stock exchange more than doubled from December 1997 to April 1999. DRAM chip prices rose again, as Yun had predicted they would, providing another source for the immense increase in Samsung's profits. "Half the credit goes to our restructuring and the other half to the booming demand in Drams and LCDs," Yun told Ravi Velloor. In June 1999 the Korea Management Association named him the most successful CEO in Korea, and at the end of the year he was named vice chairman of Samsung Electronics, second only in the entire Samsung hierarchy to chairman Lee Kun Hee.

"We want to become a world-class company in the digital era, and in particular we want to become the best in terms of digital convergence and core components," Yun explained to Eric Minton. Following the restructuring, Yun touted the virtues of a new technology, called "digital convergence," in which many electronic functions, using the same microchips, are combined into one product. Digital convergence is used in such products as mobile phones that double as game-playing, Internet-enabled computers. This required the development of a new microchip, and Samsung, because of its premier place in microchip production, was in an ideal position to lead the development of such technology. The results were such products as color-screen mobile phones; smaller, notebook computers; and enhanced camcorders. "The IT industry is heading towards convergence," Yun told Andrew Ward. "TVs, camcorders, mobile phones, PCs and other digital devices are being connected together through networks. We make all of these products and we make the chips needed to operate them. We are better placed than any other company in the world to enjoy the benefits of digital convergence."

By 2001 Samsung Electronics had a truly diverse line of products. Yun told Andrew Stevens for CNN International's E-Biz Asia (May 12, 2001) that 25 percent of Samsung Electronics' revenue came from semiconductors, compared with 35 percent from digital media (including PCs) and 25 percent from telecommunications. By March 2002 Samsung Electronics was the world's largest supplier of flat-panel monitors and DRAM chips and the third-largest supplier of mobile handsets. In October 2002 the company reached a deal with the International Olympic Committee to be the "Official Wireless Communications Equipment Partner" for the 2006 and 2008 Olympic Games. That same year, Samsung introduced an Internet-enabled refrigerator and the world's smallest portable DVD player. Profits, which were $2.7 billion in 1999, rose to $5.7 billion in 2002. Some in the media have suggested that Samsung is expanding so rapidly that it will soon threaten Sony's place as the world's largest electronics manufacturer. Yun, however, downplays such forecasts: "Companies such as Intel, Sony, Nokia, Philips: these are Samsung's business partners," he told Andrew Ward. "We sell things to them and have strategic ties. So there is no need to engage in excessive competition. We want peaceful coexistence."

"I want to lead Samsung Electronics to become one of the best companies in the world," Yun explained to Eric Minton. "And when this goal is achieved, I want to visit historical and cultural sites around the world to pursue my study of philosophy." Yun is currently the Chairman of the National Academy of Engineering of Korea, and President of Electronics Engineers of Korea. He was honored with the title of Asia's businessman of the year by Fortune magazine in January 2000 and received CNBC's Asia Business Leader Award in November 2002.

Yun is married and has two children. He enjoys playing golf. --S.H.

Suggested Reading: Asiaweek p64 May 14, 1999; Business Week p44 Dec. 20, 1999, with photo; p136 Dec. 20, 1999, with photo; Business Week Online June 24, 2002; Financial Times p14 Mar. 27, 2000, p6 Feb. 6, 2002, p15 Mar. 15, 2003, with photo; Fortune p89 Apr. 1, 2002, with photo; Fortune International p54 Jan. 24, 2000, with photo; Industrial Management p10 July 1, 1999