Samsung's "Do-or-Die" Struggle in the AI Era: Chairman Lee Calls for Urgent Action

Samsung CEO warns of "do-or-die" situation, urges investment over short-term profits

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.

Samsung needs 'do-or-die' mindset to survive AI challenges: Report

The world's largest memory-chip maker already acknowledged in October that it was facing a "crisis", and admitted questions had arisen about its "fundamental technological competitiveness and the future of the company". "Samsung is facing a do-or-die survival issue. We need to reflect deeply from the top," chairman Lee Jae-yong was quoted as saying during a training for top executives, Yonhap reported.Samsung Electronics must adopt a "do-or-die" mindset, its chairman told executives, to confront the challenges posed by artificial intelligence that are upending the industry, Yonhap news reported Monday. South Korean giant Samsung has been struggling to meet Nvidia's requirements as rival SK hynix has become the US titan's main supplier of high-bandwidth memory (HBM) chips for its AI graphics processing units (GPU). The world's largest memory-chip maker already acknowledged in October that it was facing a "crisis", and admitted questions had arisen about its "fundamental technological competitiveness and the future of the company". "Samsung is facing a do-or-die survival issue. We need to reflect deeply from the top," chairman Lee Jae-yong was quoted as saying during a training for top executives, Yonhap reported. Lee's message was to emphasise "what matters is not the crisis itself, but the attitude in dealing with it," Yonhap reported, citing company sources. Lee also said that "even if it means sacrificing short-term profits, we must invest for the future," Yonhap added. A Samsung spokesperson told AFP Monday that Lee had not "said the message himself" without giving further details. Samsung's operating profit sank almost a third in the fourth quarter last year, owing to spending on research. Lee was cleared last month of a raft of charges linked to a controversial 2015 merger which prosecutors claimed was designed to seal his control of the South Korean tech giant. During his last hearing, Lee said he was "well aware of the growing concerns about Samsung's future. "The reality we face is tougher than ever, but we are determined to overcome these challenges and take a step forward," he said at the time, according to local media.

Samsung Urges Executives To Embrace 'Death-Defying' Mindset Amid AI Challenges: 'Samsung Is Facing A Do-Or-Die Survival Issue' - Samsung Electronics Co (OTC:SSNLF)

Lee Jae-yong, Chairman of Samsung Electronics SSNLF, has urged the company's executives to adopt a "death-defying" mindset to tackle the challenges posed by the artificial intelligence (AI) era. What Happened: Lee, in a video message, addressed to around 2,000 executives of Samsung's affiliates underscored the need for a strategic shift in the company's approach, drawing on the management philosophies of late founding Chairman Lee Byung-chul and former Chairman Lee Kun-hee, as reported by The Korea Times. Lee, however, did not appear in the video himself. "Samsung is facing a do-or-die survival issue. We need to reflect deeply from the top," Lee reportedly stated in the video. He emphasized the urgency of the situation and the need to invest in the future, even at the cost of immediate profits. As part of the seminar, executives received a crystal plaque the size of a business card, engraved with the words: "Samsung people who are strong in crisis, good at reversal and fierce in competition," reinforcing the company's call for resilience. SEE ALSO: NASA Astronauts Sunita Williams And Butch Willmore Head Back To Earth On SpaceX Dragon Capsule Why It Matters: This call for a strategic shift comes at a crucial time for Samsung. Samsung has been dealing with challenges in the AI semiconductor sector, especially in high bandwidth memory (HBM), where it lags behind its competitor SK Hynix Inc. Simultaneously, the Trump administration's aggressive tariffs created uncertainty for Samsung's mobile and consumer businesses. Meanwhile, Chinese news portal Ijiwei reported that Samsung has chosen to suspend future investments in Mexico due to uncertainties surrounding Trump's proposed tariffs. Samsung's fourth-quarter revenue climbed 12% to 75.8 trillion Korean won ($52.2 billion). However, due to market conditions, operating profit declined by 30% quarter-on-quarter to 6.5 trillion Korean won ($4.48 billion). Earlier this year, Lee was acquitted of fraud and stock-rigging charges, removing a significant legal obstacle as Samsung navigates business challenges. READ MORE: Why Charlie Munger Never Sold A Single Costco Share -- The Billionaire Investor Called Himself A 'Total Addict' Of The Store Image via Shutterstock Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. SSNLFSamsung Electronics Co Ltd $42.48-13.8% Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full Score Edge Rankings Momentum- Growth- Quality- Value- Price Trend Short Medium Long Overview Market News and Data brought to you by Benzinga APIs

Samsung Chairman Lee Jae-yong calls for death-defying mindset to overcome crisis

Samsung Chairman Lee Jae-yong calls for death-defying mindset to overcome crisis Samsung Electronics Chairman Lee Jae-yong arrives at the Seoul High Court in Seoul, Feb. 3. Yonhap Samsung Electronics Chairman Lee Jae-yong has urged executives to adopt a "death-defying" mindset to navigate the intense challenges posed by the new era driven by artificial intelligence (AI), industry sources said Monday. His call was made in a video message delivered to some 2,000 executives of the company's affiliates undergoing education seminars since last month, according to the sources. The video, which also featured the management philosophies of the late founding Chairman Lee Byung-chul and former Chairman Lee Kun-hee, outlined the company's need for a strategic transformation. However, Lee himself did not appear in the recording, the sources said. "Samsung is facing a do-or-die survival issue. We need to reflect deeply from the top," Lee was quoted as saying in the video, emphasizing the urgency of the situation. "We must invest for the future, even if it means sacrificing immediate profits." As part of the seminar, the executives received a business card-sized crystal plaque engraved with the words: "Samsung people who are strong in crisis, good at reversal and fierce in competition," reinforcing the company's call for resilience. Samsung has been struggling in the AI semiconductor sector, particularly in high bandwidth memory (HBM), where it lags behind rival SK hynix Inc. Its major businesses, including TVs, smartphones and dynamic random access memory (DRAM), have also seen declining market shares last year. According to its latest business report, the global market share of Samsung Electronics' TVs fell from 30.1 percent in 2023 to 28.3 percent last year. Over the same period, that of its smartphones dropped from 19.7 percent to 18.3 percent. Its share of DRAM, where it has a dominant position, also decreased from 42.2 percent to 41.5 percent over the cited period. As a result, Samsung Electronics posted lower-than-expected earnings last year due to sluggish sales in its flagship memory business and delays in HBM rollouts. Analysts now forecast Samsung Electronics' first-quarter operating profit could decline 22.5 percent. (Yonhap)

Samsung needs 'do-or-die' mindset to survive AI challenges

AFP - Samsung Electronics must adopt a "do-or-die" mindset, its chairman told executives, to confront the challenges posed by artificial intelligence (AI) that are upending the industry, Yonhap news reported yesterday. South Korean giant Samsung has been struggling to meet Nvidia's requirements as rival SK hynix has become the US titan's main supplier of high-bandwidth memory (HBM) chips for its AI graphics processing units (GPU). The world's largest memory-chip maker already acknowledged in October that it was facing a "crisis", and admitted questions had arisen about its "fundamental technological competitiveness and the future of the company". "Samsung is facing a do-or-die survival issue. We need to reflect deeply from the top," chairman Lee Jae-yong was quoted as saying during a training for top executives, Yonhap reported. Lee's message was to emphasise "what matters is not the crisis itself, but the attitude in dealing with it," Yonhap reported, citing company sources. Lee also said that "even if it means sacrificing short-term profits, we must invest for the future," Yonhap added. A Samsung spokesperson told AFP yesterday that Lee had not "said the message himself" without giving further details. Samsung's operating profit sank almost a third in the fourth quarter last year, owing to spending on research. Lee was cleared last month of a raft of charges linked to a controversial 2015 merger which prosecutors claimed was designed to seal his control of the South Korean tech giant. During his last hearing, Lee said he was "well aware of the growing concerns about Samsung's future. "The reality we face is tougher than ever, but we are determined to overcome these challenges and take a step forward," he said at the time, according to local media.