Co-CEO Han Jong-hee and Jun Young-hyun, head of Samsung’s chip division, will be among the executives addressing shareholders at the meeting, which is scheduled to begin at 9 a.m. local time (0000 GMT). Key topics on the agenda include strategies to mitigate the impact of U.S. tariffs, plans for driving new growth, and efforts to regain Samsung’s competitive edge in the semiconductor market.
Acknowledging Lost Technological Edge
In internal meetings, Samsung has openly acknowledged that it has lost its technological leadership, particularly in the semiconductor sector. The company lags behind SK Hynix in producing high-bandwidth memory (HBM) chips, which are critical for AI graphic processing units (GPUs) used by companies like Nvidia.
A transcript of a message from Chairman Jay Y. Lee, shared at an internal executive seminar and seen by Reuters, highlighted the company’s struggles. “Our technological edge has been compromised across all our businesses,” Lee stated. *“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.”
Market Performance and Competitive Pressures
Samsung’s shares plummeted by nearly a third in 2023, while SK Hynix’s stock rose by 26%. Over the past few years, Samsung has also lost market share to Taiwan Semiconductor Manufacturing Company (TSMC) in contract chip manufacturing and to Apple and Chinese competitors in the smartphone market.
In January, Samsung warned of sluggish sales of its AI chips in the current quarter, citing U.S. export restrictions to China, its most important market. This places Samsung at a greater disadvantage compared to its rivals, as it faces additional headwinds from potential U.S. tariffs on Chinese goods.
Efforts to Regain Investor Confidence
In response to its stock plunging to more than four-year lows, Samsung announced a share buyback plan worth 10 trillion won ($7.2 billion) in November. Since then, its shares have recovered slightly, gaining 7%.
As South Korea’s most valuable company, Samsung holds a market capitalization of $235 billion, accounting for 16% of the total value of the country’s main stock exchange. Nearly 40% of investors in South Korean stocks own Samsung shares, underscoring its significance to the national economy.
The annual meeting is expected to be a critical moment for Samsung’s leadership to address shareholder concerns and outline a clear strategy for regaining its competitive edge. Key areas of focus will likely include accelerating innovation in AI and semiconductor technologies, navigating geopolitical challenges, and exploring new growth opportunities.
With the AI boom reshaping the tech landscape, Samsung’s ability to adapt and innovate will be crucial in determining its future success and restoring investor confidence.