Samsung Electronics in Suwon, South Korea, announced on Wednesday that it is exploring significant partnerships to drive growth after experiencing challenges due to its failure to capitalize on the artificial intelligence trend, resulting in poor stock performance last year. Shareholders expressed disappointment at the company’s weak financial results and urged management to take action to boost stock prices during a meeting.
Samsung’s co-CEO, Han Jong-hee, addressed shareholders and apologized for the company’s underperformance, attributing it to the fast-paced advancements in the AI semiconductor market. He mentioned that Samsung is considering expanding its stock-based performance system to employees in the coming year as part of efforts to enhance stock prices. Despite the company’s struggles, Samsung shares saw a 2.6% increase, outperforming the benchmark KOSPI index.
Looking ahead, Han informed investors that Samsung anticipates challenges in 2025 due to economic uncertainties. To drive growth, the company plans to pursue strategic mergers and acquisitions. Samsung acknowledged its setbacks, especially in the semiconductor sector, where it trails behind competitors like SK Hynix in high bandwidth memory chips crucial for AI graphic processing units. Chairman Jay Y. Lee expressed concerns about the lack of innovation and new challenges within the company’s operations.
Samsung also faces tough competition in contract chip manufacturing and smartphones from industry leaders like TSMC, Apple, and Chinese manufacturers. Jun Young-hyun, Samsung’s co-CEO overseeing the semiconductor business, acknowledged shareholder worries about growth prospects in the division and assured them that 2025 would be a year of regaining fundamental competitiveness.
Amidst challenges such as U.S. restrictions on high-end chip exports to China, Samsung plans to navigate these hurdles by adapting its global supply chain. The company aims to remain resilient in response to potential impacts from tariffs imposed by U.S. President Donald Trump.
The Trump administration is currently examining chip projects that were granted substantial subsidies under a 2022 law aimed at enhancing domestic semiconductor production, while also exploring options for U.S. investments. Key beneficiaries of these subsidies include Samsung, Intel, TSMC, Micron, and SK Hynix. Samsung, the most valuable company in South Korea, boasts a market capitalization of $235 billion, representing 16% of the total value of the country’s main stock exchange. Market data indicates that nearly 40% of investors in South Korean stocks own shares in Samsung. (Reporting by Hyunjoo Jin and Heekyong Yang; Editing by Miyoung Kim and Gerry Doyle)
