[News] Samsung Reportedly Slows Down Without Reform, Falling Behind Competitors

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According to a report from Nikkei News, under the decisive leadership of late Chairman Lee Kun-hee, South Korean company Samsung Electronics had continuously grown and expanded. However, as per the same report, with current leadership showing reluctance to take risks, Samsung has fallen behind competitors like Apple and TSMC.

Under the leadership of late Chairman Lee Kun-hee, Samsung consistently adjusted its product portfolio and reorganized its businesses, becoming a global leader in areas such as TVs, chips, displays, and mobile phones during the 2000s. However, in the decade, Samsung’s revenue and operating profit have remained largely flat, highlighting internal structural issues and a lack of reform.

Reportedly, a Samsung researcher proposed a plan to enhance chip production yield but was told by the supervisor that the proposal cannot be approved without prior examples.

The researcher explained that the reason pursuing this idea specifically is because there were no precedents to follow. Additionally, despite receiving top compensation at Samsung, the same researcher has claimed to be unable to pursue its desired work in recent years.

Most senior managers at Samsung are hired on an annual basis, and those who fail to produce results quickly will not be renewed. In this cutthroat environment, managers urge subordinates to deliver results quickly, leaving engineers with little time to dedicate to research and development projects.

A South Korean engineer who transitioned from Samsung to SK Hynix expressed that compared to Samsung’s elite culture that does not tolerate failure, SK Hynix’s corporate culture encourages employees on the front lines to face new challenges. They emphasized that SK Hynix can’t compete with Samsung without actively adopting new ideas.

Reportedly, this organizational culture at SK Hynix has yielded results in the high-bandwidth memory (HBM) market, with close ties to NVIDIA, surpassing Samsung’s advantages. Samsung has held the top spot in the global DRAM market for over 30 years but faced setbacks due to misjudging the prospects of AI.

Per TrendForce’s data, the three major HBM manufacturers held market shares are as follows: In 2023, SK Hynix and Samsung each held around 47.5%, while Micron’s share was roughly 5%. Still, forecasts indicate that SK Hynix’s market share in 2024 will increase to 52.5%, while Samsung’s will decrease to 42.4%.

Samsung’s declining competitiveness extends beyond memory. The company’s smartphone shipments led globally for over a decade but were surpassed by Apple last year. The reduction in Samsung’s smartphone shipments has also affected the sales of Samsung products used in phones, such as chips and displays.

On the other hand, Samsung set a goal in 2019 to become a global leader in system chips by 2030, but it has consistently lagged behind TSMC. Additionally, with the U.S. government seeking to bring chip manufacturing back to American soil, Intel is also entering the foundry business, putting Samsung under pressure from both TSMC and Intel.

According to TrendForce’s previous report on the fourth quarter of 2023, global semiconductor foundry revenue rankings showed that Intel Foundry Services (IFS), which ranked ninth globally in the third quarter of 2023, was pushed out of the top ten by PSMC and Nexchip due to factors such as the transition between old and new CPU generations and lackluster inventory momentum. At the same time, the top three semiconductor foundries globally were TSMC, Samsung, and GlobalFoundries.

Read more

• [News] Samsung Reportedly Commits to Advanced Packaging, Targets Over USD100 Million in Related Revenue This Year
• [News] Samsung Reportedly Establishes New HBM Team, Looking to Improve AI Chip Yield

(Photo credit: Samsung)