After Note 7 Fiasco, Samsung Eyes Splitting in Two To Boost Value

Executives with Samsung Electronics today outlined a number of strategies, which could include splitting the company two, to boost its value in the wake of "multiple challenges" in 2016. Those challenges have included its costly failure with the Galaxy Note 7 smartphone, which was recalled after widespread problems with battery overheating and fires.

While Samsung expects to take a short-term hit to profits of more than $5 billion from the Note 7 recall, the company plans to enhance shareholder returns through increased and quarterly dividend payments starting in the first quarter of next year, executives said. At the same time, the company also intends to continue investing in research and development to drive new innovations in semiconductors, smartphones and other core technologies in coming years.

Meanwhile, Samsung has engaged consultants to look into a possible reorganization of the company's structure, a review process that could take up to six months to complete. That decision comes on the heels of calls from some investors for Samsung to split the company in two.

Continued Focus on Tech Innovations

During a strategic update conference call with investors earlier today, CEO and vice chairman Oh-Hyun Kwon acknowledged that Samsung Electronics has "faced multiple challenges in 2016" and added that the global economic outlook for 2017 appears "uncertain." Despite that the company plans to continue working to develop new technologies in a number of key areas, he said.

In addition to semiconductors and smartphones, Samsung's R&D is also expected to keep focusing on artificial intelligence, virtual reality, flexible screen technologies and smart automotive technologies.

Earlier this month, Samsung said it was acquiring the automotive technology company Harman International Industries for around $8 billion. Expected to close sometime in mid-2017, the deal is aimed at boosting market opportunities in connected car technologies.

"We believe this market opportunity will...

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