• Samsung Chairman Lee Jae-Yong urged executives to tackle the company’s ongoing challenges, calling it a “do-or-die survival issue.”
  • Samsung reported a 29% drop in Q4 2024 operating profit, while its semiconductor unit struggled to compete with TSMC and SK Hynix.

Samsung Electronics Chairman Lee Jae-Yong has reportedly delivered a strong message to 2,000 executives across the company’s affiliates, urging them to address the company’s ongoing struggles.

Speaking in a seminar titled ‘Restoring Samsung’, Lee highlighted the challenges the company is facing and called for a strategic reassessment.

According to South Korean media outlet Yonhap News Agency, Lee addressed employees in a video message, stating,

“Samsung is facing a do-or-die survival issue. We need to reflect deeply from the top.”

He further emphasized the importance of future investments, even at the cost of short-term profitability. “We must invest for the future, even if it means sacrificing immediate profits,” he added.

Lee also criticized the company’s leadership, pointing out that Samsung’s defining strengths during past crises appear to have diminished. “You have lost the power that characterizes Samsung,” he said, stressing the need to restore resilience. He urged the company to focus on hiring and developing top-tier talent while driving innovation in new technologies.

Samsung has been grappling with financial difficulties in recent months. In January, the company reported its Q4 2024 earnings, revealing an operating profit of 6.5 trillion won ($4.48 billion), a 29% decline from the previous quarter.

The company had already issued a public apology after its Q3 2024 semiconductor unit profits dropped 40% from the previous quarter. Samsung’s foundry division has struggled to compete with Taiwan Semiconductor Manufacturing Company (TSMC), and it has lagged behind SK Hynix, NVIDIA’s primary supplier of high-bandwidth memory (HBM) chips for GPUs.

Also, the company had difficulties meeting NVIDIA’s stringent performance requirements for HBM chips, though it reportedly secured approval to supply them in January.

Looking ahead, Samsung has acknowledged that earnings improvements in Q1 2025 may be limited due to “weakness in the semiconductor business.” The company has also reduced its investment in its foundry division to around 5 trillion won this year, down from approximately 10 trillion won in 2024.

In response to financial challenges, Samsung reportedly implemented an “emergency mode” last year, requiring executives across all divisions to work six days a week. The move was driven by disappointing financial results in 2023.

With Lee Jae-Yong’s latest call to action, Samsung is expected to focus on long-term investments, talent development, and innovation as it navigates an increasingly competitive market.

Edited by Harshajit Sarmah