Samsung, the world’s top memory chip producer, issued a rare apology after announcing an expected operating profit of $6.78 billion for the recent quarter, which fell about $900 million below analysts’ expectations.
“We have raised concerns about our core technological competitiveness and the company’s future by failing to meet market expectations,” said Samsung Vice Chairman Jun Young-hyun in a statement. “Many are discussing a crisis at Samsung, and as the leadership of the business, we are fully responsible.”
The so-called “crisis” led Samsung to introduce a six-day workweek for its executives earlier this year. This move followed disappointing financial results throughout 2023, driven by increased competition and a decline in chip demand after the pandemic surge.
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Despite the AI boom contributing to a 15x profit increase last quarter, Samsung expected future growth to come from high-bandwidth memory chip sales to Nvidia. However, the company now reports that sales of its high-end HBM3E chips to a major customer have been delayed, opening the door for competitors like SK Hynix. Additionally, Samsung is facing increased pressure from Chinese competitors in the conventional chip market used in smartphones and other devices.
Below is the full translated apology:
“To our valued customers, investors, and employees who have always supported Samsung Electronics,
We, the management of Samsung Electronics, wish to express our sincere apologies. Our recent performance, which fell short of market expectations, has raised concerns about our technological competitiveness and the future of the company. Many are now discussing a crisis at Samsung, and as the leaders of the business, we take full responsibility for this situation.
Dear customers, investors, and employees, Samsung has a long history of overcoming challenges through innovation and resilience, turning crises into opportunities. We are determined to transform the difficult situation we face today into a stepping stone for future growth. Our management team will take the lead in overcoming this crisis and restoring our core technological competitiveness. Technology and quality are the foundation of Samsung Electronics, and we take great pride in maintaining these standards. Instead of focusing on short-term fixes, we are committed to securing long-term competitiveness.
Additionally, we will focus on preparing thoroughly for the future. We will reignite our passion for pioneering new frontiers and work relentlessly to achieve our goals. We will adopt a proactive mindset aimed at reaching higher objectives, rather than merely defending what we already have.
Lastly, we will reassess our organizational culture and work methods, making immediate improvements where necessary. We will restore our culture of trust and open communication. If issues arise in the field, we will address them openly, engaging in discussions to find solutions. Moreover, we will continue to communicate actively with our investors whenever opportunities arise.
Dear customers, investors, and employees, I am confident that by embracing these challenges, we can transform this current crisis into a new opportunity. We seek your continued support and encouragement so that Samsung Electronics can once again demonstrate its strength.
Thank you.
Samsung Electronics DS Division Vice Chairman Jun Young-hyun”
