‘Samsung is Facing a Do-or-Die Situation,’ Chairman Lee Jae-Yong Tells Executives
Korean tech giant Samsung Electronics chairman Lee Jae-Yong reportedly conveyed a strong message to 2,000 executives of the company’s affiliates in a seminar titled ‘Restoring Samsung’. The seminar was aimed at mitigating the company’s challenges. As reported by South Korean media outlet Yonhap News Agency, Jae-Yong said in a video message to employees, “Samsung is facing a do-or-die survival issue. We need to reflect deeply from the top.” “We must invest for the future, even if it means sacrificing immediate profits,” he added. Furthermore, he criticised Samsung executives and said, “You have lost the power that characterises Samsung.” He added that the company’s “unique resilience” during times of crisis is nowhere to be found. The chairman also emphasised hiring and nurturing top-notch talent and pursuing building technology that doesn’t exist yet. Samsung has continuously faced difficulties regarding its profits and market share over the last few months. In January, the company revealed its Q4 2024 earnings and reported an operating profit of 6.5 trillion won ($4.48 billion), representing a 29% decline from the third quarter. At the end of the third quarter, the company also issued a public apology for the disappointing profit figures. The company’s Q3 profits in the semiconductor unit were down 40% from the previous quarter, and its foundry has struggled to compete with TSMC. Samsung also fell behind its rival SK Hynix, NVIDIA’s main supplier of high-bandwidth memory (HBM) chips in GPUs. This was due to Samsung’s continuous struggles to meet NVIDIA’s stringent performance requirements for HMB chips. However, in January, Samsung reportedly approved supplying HMB chips to the company. Moreover, Samsung also said its overall earnings improvement may be limited in Q1 2025 due to“weakness in semiconductor business”. The company also substantially decreased its investment in its foundry division this year, at around 5 trillion won, compared to around 10 trillion won in 2024. It was also reported last year that Samsung shifted to an “emergency mode”, and executives at all units were directed to work six days a week. The move was largely driven by poor financial results in 2023.
“We must invest for the future, even if it means sacrificing immediate profits.”
“We must invest for the future, even if it means sacrificing immediate profits.”
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Supreeth is an engineering graduate who is curious about the world of artificial intelligence and loves to write stories on how it is solving problems and shaping the future of humanity.