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In brief: Samsung Electronics Executive Chairman Jay Y. Lee has issued a stark warning about the company’s declining market share, particularly in AI semiconductors. In a rare and candid address to thousands of executives, he stated that Samsung is facing “a do-or-die survival issue.”
Lee’s remarks were delivered via a prerecorded video at a recent internal seminar attended by approximately 2,000 executives from Samsung’s various affiliates. The seminars are part of the company’s broader effort to restore what it calls “Samsung’s true identity.”
In the video, Lee bluntly states, “Samsung is facing a matter of survival.” He urged executives to deeply reflect on the situation and prepare for difficult measures, even if it requires sacrificing short-term profits to secure the company’s future.
The warning comes at a critical time. Samsung’s annual shareholders’ meeting is set for March 19, and all eyes are on the company’s strategy to address its growing challenges.
Samsung has been grappling with declining market share and profits across multiple sectors including TVs, smartphones, and even DRAM. However, its biggest challenge appears to be in the semiconductor and AI chip markets, where the company is losing ground to rivals.
Last year, reports surfaced that Samsung had shifted its executives to a grueling six-day workweek to “inject a sense of crisis” after recognizing its struggles in AI chips. However, the strategy does not seem to have delivered the intended results.
Investors are growing restless as well and have demanded a clear roadmap from management on how Samsung plans to boost earnings, stabilize its stock price, and recover from what analysts have called an unprecedented crisis for its core businesses.
The pressure on Lee is mounting, but he has reportedly been constrained by legal troubles for nearly a decade. He was acquitted earlier this year of stock-rigging and accounting fraud charges related to a controversial 2015 merger. However, prosecutors have since appealed the ruling to the Supreme Court, prolonging his legal battles.
For now, Lee appears to be making calculated moves ahead of the shareholders’ meeting – such as this latest warning. The Korea Herald, citing analysts, suggests that this is a strategic effort to project proactive leadership and move away from his previously more passive approach.
Samsung’s stock reacted positively to Lee’s tough talk, climbing more than five percent on Monday.
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