Samsung Electronics Co yesterday said it is looking at major deals to drive growth, as it faced tough questions from shareholders after its failure to ride an artificial intelligence (AI) 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.
Photo: Reuters
Samsung co-CEO and head of semiconductor business Jun Young-hyun pledged to catch up in the high-bandwidth memory (HBM) chip race and apologized for the company’s poor stock performance.
“We were late in reading the market trends and we missed out on the early market as a result,” Jun said at the meeting.
Co-CEO Han Jong-hee told investors that this year would be a difficult year because of uncertainties surrounding economic policies in major economies, and that Samsung would pursue “meaningful” mergers and acquisitions (M&As) to address investor concerns about 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 Inc in HBM chips that Nvidia Corp and others rely on for AI graphics processing units.
“Our technological edge has been compromised across all our businesses,” Samsung chairman Jay Y. Lee said in a message to an internal executive seminar.
“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,” he said.
In recent years, Samsung has also lost market share to Taiwan Semiconductor Manufacturing Co (台積電) in contract chip manufacturing and to Apple Inc and Chinese rivals in smartphones.
Jun pledged to shareholders that this year would be “the year when we recover our fundamental competitiveness.”
Still, Samsung faces bigger headwinds than rivals from further US 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 would flexibly respond to US President Donald Trump’s tariffs with its global supply chain and manufacturing footprints, while looking at options for US investments.
Samsung is South Korea’s most valuable company, with its market capitalization of US$235 billion accounting for 16 percent of the total value of the country’s main bourse. Nearly 40 percent of investors in South Korean stocks own Samsung shares, according to market data.
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