“Samsung Electronics Issues Apology to Investors Amid Struggles in Memory Chip Sector and Growing Competition”

In a rare and candid address to investors, Samsung Electronics has publicly acknowledged the challenges it faces in the highly competitive memory chip sector. Jun Young-hyun, the newly appointed head of Samsung’s semiconductor division, admitted to a “potential crisis” following a disappointing financial report that revealed underwhelming revenue and profits.

The company, once a leader in the memory chip market, is now grappling with mounting pressures as competitors such as SK Hynix and Taiwan Semiconductor Manufacturing Co. (TSMC) advance in critical areas. Samsung specifically highlighted delays in delivering high-bandwidth memory (HBM) chips used for AI training with Nvidia processors, a space where SK Hynix has quickly gained an upper hand.

Additionally, Samsung faces stiff competition from a legacy Chinese memory chipmaker and has struggled to keep up with TSMC in outsourced custom chip production. As a result, Samsung is bracing for potential “inventory adjustments” and reassessing its technical competitiveness amid concerns about the company’s direction. Jun stressed the need for a thorough review of Samsung’s organizational culture and processes, suggesting that structural changes are on the horizon.

With the rapid expansion of AI hardware, rivals such as SK Hynix and Micron Technology have benefited, while Samsung’s recent performance has been less than stellar. The company recently reported a smaller-than-expected rise in operating profit, reaching approximately 9.1 trillion won ($6.8 billion) in the third quarter, due in part to one-time performance bonuses. To combat the downturn, Samsung has begun reducing its global workforce, including layoffs in Southeast Asia, Australia, and New Zealand.

Despite these setbacks, Jun emphasized Samsung’s resilience and storied history of overcoming adversity. “At Samsung, we have a deep and proven history of turning difficulties into key opportunities,” he said, conveying optimism that the company will rise to meet the current challenges and reclaim its market position.