Samsung Electronics is working to regain investor confidence after its stock price plummeted nearly 30% last year, reaching a four-year low in November.
At Wednesday’s shareholder meeting, executives admitted missteps and outlined an aggressive plan, including a $7.2 billion share buyback and potential mergers and acquisitions, to reclaim lost ground in the AI-driven semiconductor race.
In the chip industry, Samsung has fallen behind competitors like SK Hynix in high-bandwidth memory (HBM) chips, an important component in AI-driven data centres. While other companies capitalised on thriving demand, Samsung’s shares tumbled, erasing billions in market value.
Long-time investors are unhappy about the situation, with a 65-year-old shareholder, Lee, summing up the mood: “Last year, the stock price was so bad that I even considered investing in U.S. stocks instead.”
Jun Young-hyun, co-CEO and head of Samsung’s semiconductor unit, acknowledged the company’s failure to act swiftly. “We were late in reading the market trends and we missed out on the early market as a result,” he admitted.
Samsung’s leadership has now mapped out its response. In November, the company launched a $7.2 billion share buyback to stabilise stock performance. But executives know that financial manoeuvres alone won’t restore long-term growth.
Co-CEO Han Jong-hee warned that 2025 would be fraught with global economic uncertainties. To counteract this, Samsung is pursuing “meaningful” mergers and acquisitions.
“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,” Han assured shareholders.
Again, Samsung is considering expanding its stock-based performance incentive scheme to employees, hoping to drive internal motivation and align workers with the company’s turnaround efforts.
Beyond pressure from shareholders, internal dissatisfaction is growing. Leaked comments from Chairman Jay Y. Lee at an executive seminar revealed concerns about stagnation. “Our technological edge has been compromised across all our businesses. 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.”
The company’s decline is seen across multiple sectors:
- Memory Chips: SK Hynix has taken the lead in HBM technology.
- Contract Chip Manufacturing: TSMC continues to dominate the industry.
- Smartphones: Apple and Chinese rivals are chipping away at Samsung’s market share.
Jun assured shareholders that 2025 would be a good year for recovery. “It will be the year when we recover our fundamental competitiveness,” he said.
Samsung is also navigating geopolitical risks. The U.S. government’s restrictions on high-end chip exports to China is a major challenge, as China has become Samsung’s largest market due to stockpiling by local firms.
Added to these, Washington is reviewing subsidies granted under the 2022 CHIPS Act. Samsung, Intel, TSMC, and SK Hynix have all received substantial funding, but shifting U.S. policies could impact future semiconductor investments.
Han stated that Samsung would adapt as needed.
“We will flexibly respond to U.S. tariffs with our global supply chain and manufacturing footprints, while looking at options for U.S. investments.”
Even with these issues, Samsung is still South Korea’s most valuable company, accounting for 16% of the country’s stock market capitalisation. Nearly 40% of domestic investors hold Samsung shares, underscoring its importance in the economy.
But rivals are surging ahead and investor patience thinning, 2025 will be a make-or-break year for Samsung. If its recovery plan fails, the company risks falling even further behind in the competitive tech space.
