8 october 2024 : Samsung Electronics issued an apology to investors after revealing disappointing results, acknowledging that its once-dominant position in the memory chip industry is under threat. Jun Young-hyun, the newly appointed head of the semiconductor division, vowed to overhaul the business following the release of revenue and profit figures that fell short of expectations. The company also admitted to delays in delivering a critical chip used with Nvidia’s AI processors, allowing SK Hynix to gain dominance in the high-bandwidth memory market.
In addition to trailing SK Hynix in high-bandwidth memory (HBM), Samsung has also struggled to compete with Taiwan Semiconductor Manufacturing Co. in custom chip production. The company highlighted challenges like “inventory adjustments” from unnamed clients and intensified competition from less advanced Chinese memory chipmakers. As a result, Samsung’s stock dropped by 1.8%, bringing its year-to-date loss to over 20%.
“These are testing times,” Jun said, taking full responsibility for the company’s struggles and acknowledging concerns about its technical competitiveness. Despite the growing AI hardware market, which has benefited rivals like Hynix and Micron, Samsung has yet to make significant progress.
Jun emphasized the need for a cultural and organizational shift at Samsung, reflecting earlier statements about fundamental changes within the company. Samsung has already begun cutting jobs in regions like Southeast Asia, Australia, and New Zealand as part of a broader global workforce reduction plan.
In its latest report, Samsung revealed lower-than-expected growth in operating profit and revenue for the September quarter. The company will provide more detailed financial results on Oct. 31. Analysts have lowered their price targets for Samsung, reflecting concerns over its performance in the semiconductor space. Despite these setbacks, Jun expressed confidence that Samsung would overcome these challenges and focus on strengthening its long-term competitiveness rather than relying on short-term fixes.
