[News] Samsung Electronics Anticipates Mounting Challenges Amid Faltering Chip Business

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According to a report from Liberty Times, citing Chosun Daily, Samsung Electronics is currently facing a series of challenges, including competition from China, potential U.S. tariff hikes, and a slow progress in South Korea’s semiconductor policies.

The report notes that Samsung must achieve significant progress in AI chips and HBM to address these challenges. Additionally, the report emphasizes the need for policy support, such as passing the K-Chips Act, which aims to exempt R&D personnel from South Korea’s 52-hour workweek limit.

As the report highlights, Samsung’s most urgent challenge stems from Chinese competitors flooding the general DRAM market with significantly low prices.

According to TrendForce, rapid capacity expansion by Chinese suppliers has positioned them as the largest source of DRAM production outside the top three global suppliers. Additionally, ongoing weakness in consumer electronics demand is expected to further impact DRAM pricing in 2025.

Donald Trump’s return to office on January 20 poses another imminent risk, as indicated by the report. Trump administration’s protectionist tariff policies could increase the cost of Samsung’s memory chips while reducing demand for smartphones and PCs that incorporate them.

Furthermore, the proposed K-Chips Act, which aims to exempt semiconductor R&D personnel from South Korea’s 52-hour workweek restriction, remains stalled in the legislative process, as noted in the report. The report also points out that the exemption would impact only about 7,000 employees, roughly 9% of Samsung’s 75,000 semiconductor workforce.

Read more

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• Weak Demand Outlook and Rising Inventory and Supply Pressure DRAM Prices Down for 2025, Says TrendForce

(Photo credit: Samsung)