Samsung Electronics 'Trapped in the KRW 50,000 Swamp'... "Vows to Secure Competitiveness in AI and Robotics"

[Korea Financial Times, Kim JaeHun] Samsung Electronics apologized to shareholders for its poor performance and stock price last year, promising to restore fundamental competitiveness. Vice Chairmen Han Jong-hee of the DX Division and Jeon Young-hyun of the DS Division repeatedly bowed to shareholders, vowing not to repeat the mistakes of the previous year. They also unveiled plans for transitioning to next-generation business structures based on AI and robotics across all business areas.

Samsung Electronics held its 56th Annual General Meeting on March 19 at the Suwon Convention Center in Gyeonggi Province. In addition to voting on major agenda items, the company continued its "Dialogue with Shareholders" from last year, explaining business strategies for each division to shareholders.

Last year, Samsung Electronics faced a crisis of historic proportions, struggling in its core semiconductor business and other major operations. According to Samsung Electronics' 2024 business report, the company's DRAM market share fell from 42.2% in 2023 to 41.5% last year. Smartphone market share decreased from 19.7% to 18.3%, and TV market share dropped from 30.1% to 28.3% during the same period.
The poor performance of the semiconductor business, which significantly impacts Samsung Electronics' stock price, was particularly painful. Last year, Samsung Electronics lost to SK hynix in the competition for "HBM" (High Bandwidth Memory), a key product in next-generation AI memory, resulting in an operating profit reversal for the first time in history. As a result, the stock price, which was in the KRW 80,000 range in March last year, fell to the KRW 50,000 range and has continued to struggle.

At the shareholders' meeting, complaints from shareholders were rampant, with comments such as "Samsung Electronics' management seems unable to keep up with future trends" and "The current stock price has been stuck in the KRW 50,000 range for a long time; please explain clear measures for stock price recovery." Some shareholders even mentioned the competitor SK hynix, stating, "SK hynix keeps rising while Samsung Electronics keeps falling. This is the reality."


Vice Chairman Han Jong-hee, who chaired the shareholders' meeting, said, "I am very sorry for disappointing our shareholders last year. As we expect the semiconductor market and IT demand to recover this year, we will do our best to enhance shareholder value by actively responding to AI memory and expanding sales of AI-equipped smartphones to achieve solid performance."

He added, "We will lay the foundation for a rebound in existing businesses through ultra-gap technology leadership and continue to take on new challenges in various areas such as robotics, medtech, and next-generation semiconductors to secure new growth engines for the future created by AI industry growth."
Han Jong-hee also introduced plans to enhance shareholder value and secure future business competitiveness. In particular, he promised to show results this year in large-scale M&As as well as the previously announced treasury stock cancellation plan.

"Samsung Electronics plans to pay annual dividends of KRW 9.8 trillion to enhance shareholder value," Han said. "We completed the cancellation of KRW 3 trillion worth of treasury stocks acquired in the first phase over the past three months in February, and we are faithfully proceeding with the second phase of KRW 3 trillion treasury stock repurchase. We will continue to do our best in shareholder-centric management."

He continued, "As management, I sincerely apologize for not showing sufficient results in large-scale M&As that shareholders expect. We fully recognize the importance of M&As and have been pursuing them in various areas to secure growth engines. We will pursue meaningful M&As and produce tangible results."

In the subsequent agenda deliberation and voting, all items were approved without any significant issues. The agenda items included ▲approval of financial statements ▲appointment of four outside directors (Kim Jun-sung, Huh Eun-nyeong, Yoo Myung-hee, Lee Hyuk-jae) ▲appointment of three internal directors (Jeon Young-hyun, Roh Tae-moon, Song Jae-hyuk) ▲appointment of two audit committee members (Shin Je-yoon, Yoo Myung-hee) ▲approval of director remuneration limits.


After the agenda voting, Vice Chairmen Han Jong-hee and Jeon Young-hyun shared the 2025 business strategies for Samsung Electronics' DX and DS divisions with shareholders and held a separate Q&A session. Samsung Electronics' management listened to shareholders' opinions and introduced this year's business strategies.

The semiconductor division attracted the most interest from shareholders. They raised questions and criticisms about HBM yield issues and the foundry business. In particular, some shareholders continued to criticize management regarding the HBM yield problem.

Vice Chairman Jeon Young-hyun said, "I believe Samsung Electronics' stock price performance is largely determined by semiconductor performance. I apologize once again for causing concern to shareholders due to the stock price decline resulting from poor semiconductor performance."

He emphasized, "I think the main reason for the stock price decline is that our market competitiveness has fallen due to somewhat inadequate initial response in the HBM market. We will not repeat last year's mistakes in the competition for next-generation products such as HBM4 (6th generation) and customized HBM. We plan to accelerate the transition to the AI memory market and actively respond to customer demand.

Along with this, the company plans to lead the semiconductor market by establishing strategies tailored to the characteristics of each business division. For memory, it will secure competitiveness in next-generation AI products through timely development of HBM based on advanced processes and actively respond to market requirements by expanding the lineup of high-performance, high-capacity SSDs (Solid State Drives).


Additionally, the company will respond to market weakness in the first half of the year by accelerating the transition to advanced processes and expanding sales of server-centered products to maximize sales and profitability. In foundry, the plan is to improve customer satisfaction by securing business competitiveness based on customer service-oriented thinking.

In particular, to build customer-centric design infrastructure, the company will proactively prepare application-specific IPs (Intellectual Property) and improve design capabilities. It also plans to improve its profit structure through yield improvement and cost reduction.

The System LSI business division will pursue business stabilization for stable growth by strengthening product competitiveness. For SoC (System on Chip), the focus will be on maximizing performance for next-generation flagship smartphone adoption. For image sensors, the company will expand market share based on high-pixel competitiveness, securing new customers and entering new markets. Furthermore, to enhance solution competitiveness, the company will pursue display IC technology differentiation and expansion of the power management IC business.

Vice Chairman Jeon emphasized, "We will continue to invest in facilities and R&D to strengthen future growth, with a particular focus on bold investments in research and development. By concentrating on enhancing growth potential and profitability, we plan to build a foundation for sustainable growth in any environment and continue to grow our business based on differentiated products and technology leadership."

Kim JaeHun (rlqm93@fntimes.com)