Samsung Faces Shareholder Scrutiny Over AI Missteps and Stock Performance

Samsung to face questions from shareholders after AI chip failings, stock price drop

SEOUL, March 18 (Reuters) - Samsung Electronics (005930.KS), opens new tab is set for a tough annual general meeting on Wednesday with shareholders frustrated by its failure to ride a boom in artificial intelligence that made it one of the worst-performing tech stocks last year. Co-CEO Han Jong-hee and the head of its chip division Jun Young-hyun will be among executives attending the meeting which is scheduled to start at 9 a.m. (0000 GMT). Other issues in focus include strategies to mitigate the impact of U.S. tariffs and what will drive new growth. In internal meetings, Samsung has acknowledged it has lost its technological edge. This is particularly true in semiconductors where it lags SK Hynix (000660.KS), opens new tab in high bandwidth memory (HBM) chips that Nvidia (NVDA.O), opens new tab and others rely on for AI graphic processing units. "Our technological edge has been compromised across all our businesses," according to a transcript of a message from Chairman Jay Y. Lee given to an internal executive seminar that was seen by Reuters. "It's hard to see that efforts are being made to drive big innovation or tackle new challenges. There are only efforts to maintain a status quo rather than shaking things up." Shares in Samsung tumbled by nearly a third last year while those of SK Hynix climbed 26%. In recent years, Samsung has also lost market share to TSMC (2330.TW), opens new tab in contract chip manufacturing and to Apple (AAPL.O), opens new tab and Chinese rivals in smartphones. In January, Samsung warned of sluggish sales of its AI chips in the current quarter due to U.S. export restrictions to China, which has become its most important market. That also means it faces bigger headwinds than rivals from potential U.S. tariffs on China. The tech giant launched a share buyback plan worth 10 trillion won ($7.2 billion) in November after its stock plunged to more than four-year lows. Its shares have gained 7% since then. Samsung is South Korea's most valuable company, with its market capitalisation of $235 billion accounting for 16% of the total value of the country's main bourse. Nearly 40% of investors in South Korean stocks own Samsung shares, according to market data. Reporting by Hyunjoo Jin; Editing by Miyoung Kim and Edwina Gibbs Our Standards: The Thomson Reuters Trust Principles., opens new tab Suggested Topics:Artificial Intelligence

Samsung CEO says company will pursue deals as it struggles for growth

Han Jong-hee, co-chief executive officer of Samsung Electronics Co., speaks at the company's annual general meeting at the Suwon Convention Center in Suwon, South Korea, on Wednesday, March 19, 2025. Samsung Electronics said on Wednesday it is looking at major deals to drive growth as it faced tough questions from shareholders after its failure to ride an artificial intelligence boom made it one of the worst-performing tech stocks last year. The South Korean firm has been suffering from weak earnings and sagging share prices in recent quarters after falling behind rivals in advanced memory chips and contract chip manufacturing, which have enjoyed strong demand from AI projects. Shareholders slammed management for poor stock performance and called for measures to revive stock prices at the meeting. "First and foremost, I sincerely apologize for the recent stock performance not meeting your expectations. Over the past year, our company failed to adequately respond to the rapidly evolving AI semiconductor market," Samsung co-CEO Han Jong-hee said at the meeting. Samsung, which has introduced a stock-based performance system to executives last year, is considering expanding the scheme to employees next year, as part of efforts to review its stock prices, Han said. Samsung shares were trading up 2.6%, compared with the benchmark KOSPI's 1% rise as of 9:16 a.m. (0116 GMT). "The stock performance has been disappointing," a 65-year old shareholder who only gave his family name, Lee, told Reuters ahead of the meeting. "Last year, the stock price was so bad that I even considered investing in U.S. stocks instead," he said.

Samsung Apologizes Yet Again For AI Missteps, Promises Major Deals As Shareholders Fume Over Plunging Stock: 'Our Company Failed To...' - Samsung Electronics Co (OTC:SSNLF), NVIDIA (NASDAQ:NVDA)

After months of investor frustration, Samsung Electronics Co.'s SSNLF leadership is once again on the defensive -- this time pledging bold moves to recover lost ground in AI and chip dominance. What Happened: On Wednesday, At the company's annual shareholder meeting in Suwon, South Korea, Samsung co-CEO Han Jong-hee issued another public apology, reported Reuters. "First and foremost, I sincerely apologize for the recent stock performance not meeting your expectations. Over the past year, our company failed to adequately respond to the rapidly evolving AI semiconductor market," Han stated. See Also: Meta's AI Push Could Add $100 Per Share While Tesla Faces EV Headwinds: Top Analyst He said the company will also adjust its supply chain strategy in response to global trade dynamics, including U.S. tariffs. Han also promised that Samsung would pursue "meaningful" mergers and acquisitions to spark growth. Why It's Important: Samsung has lost ground to rivals like SK Hynix and Taiwan Semiconductor Mfg. Co. Ltd. TSM in key semiconductor segments, especially high-bandwidth memory chips used by Nvidia Corporation NVDA for AI applications. Subscribe to the Benzinga Tech Trends newsletter to get all the latest tech developments delivered to your inbox. This is Samsung's second public apology in five months. "We have caused concerns about our fundamental technological competitiveness and the future of the company due to our performance falling short of the market's expectations," the company said in a statement released in October. "Many people are talking about Samsung's crisis. We, who are leading the business, are responsible for all of this." Samsung's fourth-quarter revenue rose 12%, reaching 75.8 trillion Korean won ($52.2 billion). However, due to market conditions, its operating profit dropped 30% quarter-over-quarter to 6.5 trillion Korean won ($4.48 billion). Image credits: Arcansel on Shutterstock. Check out more of Benzinga's Consumer Tech coverage by following this link. Read Next: Elon Musk's $97.4 Billion OpenAI Takeover Bid Reportedly Not Received By ChatGPT Parent: 'Another One Of His Tactics,' Says Sam Altman Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors. NVDANVIDIA Corp$114.78-3.97%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum84.14Growth88.69Quality96.81Value6.97Price TrendShortMediumLongOverviewSSNLFSamsung Electronics Co Ltd$42.48-13.8%TSMTaiwan Semiconductor Manufacturing Co Ltd$172.51-1.74%Market News and Data brought to you by Benzinga APIs

Samsung CEO says company will pursue deals as it struggles for growth

Samsung Electronics said on Wednesday it is looking at major deals to drive growth as it faced tough questions from shareholders after its failure to ride an artificial intelligence boom made it one of the worst-performing tech stocks last year. The South Korean firm has been suffering from weak earnings and sagging share prices in recent quarters after falling behind rivals in advanced memory chips and contract chip manufacturing, which have enjoyed strong demand from AI projects. Shareholders slammed management for poor stock performance and called for measures to revive stock prices at the meeting. "First and foremost, I sincerely apologize for the recent stock performance not meeting your expectations. Over the past year, our company failed to adequately respond to the rapidly evolving AI semiconductor market," Samsung co-CEO Han Jong-hee said at the meeting. Samsung, which has introduced a stock-based performance system to executives last year, is considering expanding the scheme to employees next year, as part of efforts to review its stock prices, Han said. Samsung shares were trading up 2.6%, compared with the benchmark KOSPI's 1% rise as of 9:16 a.m. (0116 GMT). "The stock performance has been disappointing," a 65-year old shareholder who only gave his family name, Lee, told Reuters ahead of the meeting. "Last year, the stock price was so bad that I even considered investing in U.S. stocks instead," he said. Shares in Samsung tumbled by nearly a third last year and hit a four-year low in November, while those of rival SK Hynix climbed 26%. Samsung launched a share buyback plan worth 10 trillion won ($7.2 billion) in November and its shares have since gained 7%. Major deals Han told investors that 2025 would be a difficult year because of uncertainties surrounding economic policies in major economies and that Samsung would pursue "meaningful" mergers and acquisitions to drive growth. "There are some difficulties in doing semiconductor M&As due to regulatory issues and various national interests, but we're determined to produce some tangible results this year," he said. In internal meetings, Samsung has acknowledged it has lost ground. This is particularly true in semiconductors, where it lags SK Hynix in high bandwidth memory (HBM) chips that Nvidia and others rely on for AI graphic processing units. "Our technological edge has been compromised across all our businesses," said a transcript of a message from Chairman Jay Y. Lee given to an internal executive seminar that was seen by Reuters. "It's hard to see that efforts are being made to drive big innovation or tackle new challenges. There are only efforts to maintain a status quo rather than shaking things up." In recent years, Samsung has also lost market share to TSMC in contract chip manufacturing and to Apple and Chinese rivals in smartphones. Jun Young-hyun, Samsung co-CEO and head of its semiconductor business, acknowledged shareholder concerns about growth prospects for the division and pledged to shareholders that 2025 would be "the year when we recover our fundamental competitiveness". Still, Samsung faces bigger headwinds than rivals from further U.S. restrictions on high-end chip exports to China, as the country has become Samsung's most important market thanks to chip stockpiling by Chinese firms. Han said Samsung will flexibly respond to U.S. President Donald Trump's tariffs with its global supply chain and manufacturing footprints while looking at options for U.S. investments. The Trump administration is reviewing chip projects that received billions in subsidies under a 2022 law meant to boost domestic semiconductor output. Major award recipients include Samsung, Intel, TSMC, Micron and SK Hynix. Samsung is South Korea's most valuable company, with its market capitalization of $235 billion accounting for 16% of the total value of the country's main bourse. Nearly 40% of investors in South Korean stocks own Samsung shares, according to market data.

Samsung eyes AI, M&A deals to boost stock performance

SEOUL (ANN/THE KOREA HERALD) - Samsung Electronics' top executives apologised to shareholders on Wednesday for the company's poor stock performance, acknowledging its failure to capitalise on the artificial intelligence boom and maintain a competitive edge in key businesses, especially chips. Facing tough questions from shareholders at this year's annual meeting, Vice Chairman and co-CEO Han Jong-hee vowed to make a "painstaking effort" to drive a rebound by enhancing Samsung's technological edge in AI chips and pursuing a "meaningful" merger and acquisition deal this year. "Escalating pressure from US tariff policies and retaliatory measures from affected countries has also had a negative impact. Despite these challenges, we are fully committed to enhancing shareholder value and will spare no effort in making necessary changes to achieve this goal." Samsung Electronics' stock price, which hovered around KRW70,000 (USD48) in March last year, has since declined to the KRW50,000 range, frustrating investors. On Wednesday, the tech giant's stock prices edged up 1.56 per cent to close at KRW58,500. Chip woes Samsung's Chip Division head, Vice Chairman Jun Young-hyun, admitted that the semiconductor business' poor performance was a key factor behind the stock decline. While Samsung remains the world's largest memory chip maker by revenue, it has been lagging behind its smaller rival SK hynix in HBM chips, a high-value component critical for AI processors. "We will do our utmost to meet shareholder expectations in our HBM business, with all employees working together to ensure we do not repeat past mistakes." Jun added that Samsung will start mass production of 12-layer HBM3E chips in the second quarter of this year or in the second half at the latest. He also noted that the company expects to mass-produce next-generation HBM4 and custom HBM chips in the second half of the year. 'Do-or-die' strategy The executives' commitments come a day after Samsung Electronics Chairman Lee Jae-yong delivered a rare, direct message, urging employees to adopt a "do-or-die" mentality to tackle mounting challenges and regain technological leadership. At the shareholders' event, Han also pledged to drive future growth through large-scale M&A deals in the semiconductor sector this year. Regarding increasing pressure from US tariffs, Han explained that Samsung is preparing various response measures, emphasizing that the company operates production facilities in multiple countries beyond Mexico and China, which are directly affected by US import duties. Samsung is also closely monitoring US policy changes related to semiconductor subsidies and is reviewing contingency plans in case the Trump administration revokes previously pledged grants, Han said. At Wednesday's event, the company's external board member Shin Je-yoon, former chairman of Financial Services Commission, was approved to assume the role of Samsung's board chair. Samsung Vice Chairman Jun Young-hyun and Song Jae-kyuk, Samsung's chief technology officer for the chip division and head of the Semiconductor Research Center, were also appointed as new internal board members following shareholder approval. Meanwhile, Samsung set up exhibition booths at the venue, where around 900 shareholders attended, showcasing its latest technologies and business innovations. The exhibition featured cutting-edge micro-LED screens, a four-legged defense and counterterrorism robot developed by Rainbow Robotics, and Ballie, a ball-shaped personal home assistant robot.