SEOUL—Visiting a semiconductor facility in early January, Samsung’s de facto leader Lee Jae-yong gave a pep talk for the year—and made a plea for the South Korean tech giant that he worried had grown stagnant.

“We should emerge as a new Samsung,” said Mr. Lee, the 53-year-old grandson of Samsung’s founder. “Together, we can open a new future.”

On...

SEOUL—Visiting a semiconductor facility in early January, Samsung’s de facto leader Lee Jae-yong gave a pep talk for the year—and made a plea for the South Korean tech giant that he worried had grown stagnant.

“We should emerge as a new Samsung,” said Mr. Lee, the 53-year-old grandson of Samsung’s founder. “Together, we can open a new future.”

On Tuesday, Samsung Electronics Co. , heeding Mr. Lee’s advice, began a new chapter: All three of its co-CEOs were replaced, and its mobile and consumer-electronics units were merged into a single unit. The consolidation may position Samsung better to create a cohesive ecosystem, much like rival Apple Inc., given how smartphones can serve as a digital fulcrum that links together with the company’s many gadgets and appliances.

It turned out to be an eventful year for both Mr. Lee and Samsung. Weeks after his January speech, Mr. Lee was imprisoned again for bribing South Korea’s ex-president, before being granted parole in August. Samsung rode a global chip shortage to record quarterly revenues and recently made its largest U.S. investment to date.

Lee Jae-yong, the de facto leader of Samsung Electronics, remains associated with another lawsuit that could bring more jail time.

Photo: Yonhap News/Zuma Press

The corporate revamp comes at a critical juncture for Samsung, the world’s No. 1 maker of smartphones, semiconductors and televisions. It is overly reliant on memory chips as a profit driver, while the glory days for mobile devices are likely over. Samsung, for years, has admitted its struggles in reinvention to tap into new areas of growth.

Though both of the new CEOs are veteran Samsung executives, the appointments are a bet that the shake-up will produce fresh ideas and business strategies, said Kim Kyeong-jun, president of CEO Score, a Seoul-based corporate research firm.

“The company recognizes that it won’t be able to successfully navigate a way forward without a generational shift in management,” Mr. Kim said.

Kyung Kye-hyun, 58 years old, will lead the company’s powerhouse components business, after having previously been CEO of another Samsung affiliate that makes other types of tech parts. Han Jong-hee, 59, and a veteran of Samsung’s TV business, will run the combined mobile and consumer-electronics unit.

Merging the smartphone unit with the home appliance division reflects Samsung’s desire to develop a full-fledged Galaxy device ecosystem that extends from its mobile devices into other consumer electronic products, said Sanjeev Rana,

a Seoul-based senior analyst at brokerage CLSA.

“Today, everyone has a mobile phone and everyone has a TV. The hardware part is pretty much over. The competition is now moving away from devices to developing ecosystems,” said Mr. Rana, citing Apple as one benchmark.

Over the years, Samsung has struck external partnerships as its internal efforts to create rival software services have fallen short. Spotify Technology SA has been the default music-streaming service across a range of Samsung products, including televisions and smartphones. Mobile apps used on some higher-end Samsung smartphones can be used on personal computers running on Microsoft Corp’s operating system.

Samsung shifted to a three CEO system in 2013, when the viability of phones, home appliances and components were more on equal footing. But now, tech components make up about three-quarters of Samsung’s operating profits.

For the moment, semiconductors are buoying Samsung’s financial performance, though the industry is cyclical. This year, powered by pandemic shifts in work and recreation, revenues rose for DRAM and NAND flash, the two major types of memory—and where Samsung is the biggest player. But buyers that have loaded up on inventory won’t need as much memory supply in 2022, according to TrendForce, a Taiwan-based market researcher.

Related Video

Corporate titans General Electric and Johnson & Johnson both announced that they are splitting, two of the latest in a long string of conglomerate break ups. Here’s why big businesses divide and what it could mean for investors. Photo illustration: Tammy Lian/WSJ The Wall Street Journal Interactive Edition

DRAM and NAND flash revenue growth jumped this year by 36% and 22%, respectively. But next year, DRAM will be flat, while NAND flash will grow by just 7%, TrendForce estimates.

Meanwhile, Samsung is engaged in a three-company race for high-end, contract chipmaking with Taiwan Semiconductor Manufacturing Co. and Intel Corp. It is a capital-intensive endeavor, with Samsung prepared to spend hundreds of billions of dollars in future years. The $17 billion investment in Taylor, Texas, announced last month is just one facet of Samsung’s broader ambitions to grow its chip prowess outside memory.

Sales of televisions, washing machines and refrigerators boomed during the pandemic. But in its most-recent quarter, Samsung’s consumer electronics unit generated revenue of roughly 14.1 trillion Korean won, or the equivalent of about $12 billion, though it led to only 0.76 trillion won in operating profit.

The smartphone industry has matured in the wealthiest markets, leading to a slowdown in what had been a lucrative business. The remaining pockets of growth are in developing countries. In the high-end market of smartphones costing $1,000 or more, far fewer consumers swap a Samsung Galaxy device for an Apple iPhone—or vice versa. In recent years, Samsung has faced major challenges by Chinese rivals that have put out phones that match the South Korean company on features but are much lower-priced.

The smartphone industry has matured in the wealthiest markets, leading to a slowdown in what had been a lucrative business. Galaxy smartphones on display in Seoul.

Photo: SeongJoon Cho/Bloomberg News

The global smartphone industry declined 7% in the third quarter from the prior year, dragged down by component shortages, according to International Data Corp., a tech market researcher. But Samsung, which retained the No. 1 spot, faced a bigger drop than the total industry, with its shipments sliding 14%.

“Flat growth, stale agendas about the future—these are things that Samsung’s leader Lee Jae-yong wants to change. And to do that he’s appointing new CEOs,” said Tom Kang, a Seoul-based research director at Counterpoint Research. “It’s clear that he wants change.”

Mr. Lee’s signoff is required for any major moves at Samsung. But even after his August parole, Mr. Lee, also known as Jay Y. Lee, is still not in the clear, as he remains associated with another lawsuit that could bring jail time. Some of Mr. Lee’s supporters have urged the South Korean government to issue the Samsung scion a presidential pardon that would acquit him of all his legal troubles.

That would help pave the way for Mr. Lee to officially take over as Samsung chairman—a role that’s been vacant since his father’s October 2020 death. But a pardon is unlikely from South Korean President Moon Jae-in, whose five-year term ends next year, said Mike Cho, a corporate governance expert and a business professor at Korea University in Seoul.

“Until he gets all the legal issues cleared, Lee Jae-yong is unlikely to take over the chairman position,” Mr. Cho said.

Write to Jiyoung Sohn at jiyoung.sohn@wsj.com