In short: Samsung Electronics Government Chairman Jay Y. Lee has issued a stark warning in regards to the firm’s declining market share, significantly in AI semiconductors. In a uncommon and candid handle to 1000’s of executives, he said that Samsung is dealing with “a do-or-die survival challenge.”
Lee’s remarks have been delivered through a prerecorded video at a latest inside seminar attended by roughly 2,000 executives from Samsung’s numerous associates. The seminars are a part of the corporate’s broader effort to revive what it calls “Samsung’s true id.”
Within the video, Lee bluntly states, “Samsung is dealing with a matter of survival.” He urged executives to deeply replicate on the state of affairs and put together for troublesome measures, even when it requires sacrificing short-term earnings to safe the corporate’s future.
The warning comes at a essential time. Samsung’s annual shareholders’ assembly is ready for March 19, and all eyes are on the corporate’s technique to handle its rising challenges.
Samsung has been grappling with declining market share and earnings throughout a number of sectors together with TVs, smartphones, and even DRAM. Nonetheless, its largest problem seems to be within the semiconductor and AI chip markets, the place the corporate is shedding floor to rivals.
Final yr, studies surfaced that Samsung had shifted its executives to a grueling six-day workweek to “inject a way of disaster” after recognizing its struggles in AI chips. Nonetheless, the technique doesn’t appear to have delivered the meant outcomes.
Traders are rising stressed as effectively and have demanded a transparent roadmap from administration on how Samsung plans to spice up earnings, stabilize its inventory value, and recuperate from what analysts have referred to as an unprecedented disaster for its core companies.
The strain on Lee is mounting, however he has reportedly been constrained by authorized troubles for practically a decade. He was acquitted earlier this yr of stock-rigging and accounting fraud costs associated to a controversial 2015 merger. Nonetheless, prosecutors have since appealed the ruling to the Supreme Court docket, prolonging his authorized battles.
For now, Lee seems to be making calculated strikes forward of the shareholders’ assembly – reminiscent of this newest warning. The Korea Herald, citing analysts, means that it is a strategic effort to challenge proactive management and transfer away from his beforehand extra passive strategy.
Samsung’s inventory reacted positively to Lee’s powerful discuss, climbing greater than 5 p.c on Monday.
