[Inside Chodong] 31 Years of Change and Innovation: Samsung's New Challenge

"If We Don't Change, We'll Become Second or Second-and-a-Half Rate"
The Late Chairman's Message Remains Relevant
All Eyes on Chairman Lee Jae-yong's U.S. Business Trip

June 7 marks the 31st anniversary of the late Samsung Electronics Chairman Lee Kun-hee's "New Management Declaration" made in Frankfurt, Germany. At that time, Chairman Lee delivered a powerful message recognizing the crisis: "Change everything except your wife and children," "We must change forever. If we don't change, we cannot survive as a first-class company," and "If we don't change, we will become second or second-and-a-half class." He called for relentless innovation to leap forward as a "top-tier company."

Kwangho Lee, Head of the Industrial IT Division Corporate Team

The situation Samsung Electronics faces now is not much different from when Chairman Lee made the New Management Declaration in 1993. The company is losing ground to competitors in the high-bandwidth memory (HBM) market, where demand has exploded due to the AI boom. Amid rising concerns about a semiconductor crisis, the National Samsung Electronics Labor Union (Jeonsamno) held a strike declaration press conference on the 29th of last month and has launched its first large-scale annual strike. With overlapping internal and external crises, Samsung Electronics is once again at a point where a leap forward through change is necessary.

Chairman Lee Jae-yong’s trip to the United States coinciding with the 31st anniversary of the New Management Declaration appears to be a move to overcome this crisis. Over two weeks, he will meet with key industry figures from the East Coast cities like New York and Washington DC to the West Coast’s Silicon Valley. More than 30 tightly scheduled meetings, broken down by the minute, have been arranged.

For his first appointment on the trip, Chairman Lee met with Hans Vestberg, CEO of Verizon, the world’s largest mobile carrier, and delivered the message: "Let’s excel at businesses everyone is doing, and be the first to succeed in businesses no one else can." This is interpreted as emphasizing the urgency that there is no future if one remains complacent and stagnant.

The business community views Chairman Lee’s actions as a direct effort to find breakthroughs in new businesses, noting that leveraging personal networks with globally competitive American companies to open new business channels is something only he can do. Indeed, during times of management crises, Chairman Lee has utilized his global network to strengthen cooperation with key clients. In May last year, during a U.S. trip lasting over 20 days, he met with big tech giants such as Sundar Pichai, CEO of Google; Satya Nadella, CEO of Microsoft; Tim Cook, CEO of Apple; Elon Musk, CEO of Tesla; and Jensen Huang, CEO of Nvidia. He also met with figures in the biotech industry, including Joaquin Duato, CEO of Johnson & Johnson (J&J), and Giovanni Caforio, CEO of Bristol-Myers Squibb (BMS).

The U.S. has many companies with unparalleled competitiveness in AI, semiconductor design, and biotech. Failure to cooperate with them could lead to having to shut down certain businesses. Some predict that following Chairman Lee’s trip, Samsung Electronics will make large-scale investments in next-generation high-performance AI fields. There is also growing interest in whether Samsung can secure major clients such as Qualcomm and AMD in the semiconductor foundry sector. The U.S. is the undisputed global leader in the fabless (semiconductor design) sector. Strengthening cooperation with the U.S. is essential for Samsung Foundry to compete with Taiwan’s TSMC.

To overcome the current crisis and leap forward once again, Samsung Electronics must recall Chairman Lee Kun-hee’s New Management Declaration and pursue relentless change and innovation.