Lee Jae-yong’s 2nd anniversary as chairman approaches (Oct 27).
Q3 2024 performance:
13% drop in operating profit vs. Q2.
Non-memory (foundry & system LSI) division loses ₩1 trillion+.
Stock at ₩59,000, foreign investors dumped ₩12.6 trillion in 2 months.
TSMC expanding dominance, SK Hynix leads HBM.
Opinion
Samsung's crisis is structural, not cyclical. The company lags behind in foundry & AI-driven semiconductors, while bureaucratic inefficiencies hinder rapid decision-making. The HBM R&D misstep in 2019 is now proving costly, while TSMC and SK Hynix widen their lead.
Core Sell Point
Samsung's weak strategic direction and slow decision-making risk permanent loss of competitiveness in AI and semiconductor markets, potentially impacting Korea’s broader economic stability.
Concerns over Samsung Electronics Chairman Lee Jae-yong's leadership are growing both domestically and internationally. Critics argue that Samsung has failed to respond proactively in the semiconductor industry, while also facing internal inefficiencies that require urgent restructuring.
Leadership Under Scrutiny
Lee Jae-yong marks his 2nd anniversary as chairman on October 27, but Samsung has no official plans for a statement.
The company also approaches its 55th anniversary (Nov 1) and 50 years in semiconductors (Dec 6), raising speculation about future strategic directions.
Despite his public appearances—such as the fourth anniversary of Samsung’s pediatric cancer support program on Oct 21—Lee has remained silent on the company's ongoing challenges.
Samsung’s Mounting Crisis
1. Semiconductor Setbacks
Falling Behind in Foundry & Advanced Chips:
TSMC dominates AI-driven demand, securing contracts with NVIDIA, Apple, AMD, and Qualcomm.
Samsung’s foundry & system LSI division posted over ₩1 trillion in losses in Q3.
In 2011, Samsung’s non-memory sales were 88% of TSMC’s; by 2023, this shrank to just 25%.
Despite ₩15 trillion annual investments, the gap is widening.
Taiwan’s Digitimes (Oct 15) stated that Samsung’s price competition strategy failed due to poor yield rates.
HBM Missteps:
SK Hynix leads the HBM market, securing early dominance in AI-driven memory.
Samsung disbanded its HBM R&D team in 2019, now struggling to catch up.
2. Stock Performance & Investor Sentiment
Stock Price:
October 21 closing price: ₩59,000 (-0.34%).
Hit 52-week low amid continued foreign selling.
Foreign investors dumped ₩12.6 trillion worth of Samsung shares over two months.
Investor Confidence Eroding:
Morgan Stanley's “Winter Looms” report forecasts a semiconductor downturn due to DRAM oversupply and HBM price declines.
Macquarie downgraded Samsung to "Neutral" from "Buy".
3. Inefficient Decision-Making Structure
Excessive Influence of Samsung’s Business Support TF (Task Force):
Led by Vice Chairman Chung Hyun-ho, this unit is criticized for slow, risk-averse decision-making.
Compared to Intel’s past missteps, where middle management bottlenecks delayed crucial technology transitions.
Internal Criticism & Employee Frustration:
Employee forum discussions describe a rigid, top-heavy reporting structure stifling innovation and accountability.
4. Lack of Bold Strategic Moves
Leadership & Talent Strategy Issues:
May 2024 appointment of new semiconductor chief Jeon Young-hyun was seen as too conservative.
No major acquisitions or aggressive R&D initiatives have been pursued.
Samsung’s Crisis = Korea’s Crisis?
Samsung accounted for 18% of Korea’s total exports in 2023 (₩150 trillion out of ₩830 trillion).
KDI research (2017) showed that shocks to Korea’s top 3 corporations explain 59% of macroeconomic volatility—highlighting Samsung’s systemic importance.
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