Samsung Responds to Lee Jae-yong's Order of "Fight to the Death" with "Founder’s Resolve" (Comprehensive)

Struggling Semiconductor Business...
Jeon Young-hyun: "Restoring Technological Leadership"
From Smartphones to Home Appliances...
Han Jong-hee: "Expanding AI Technology"
'Do-or-Die Determination' Order Answered by Samsung with "Talent and Technology"

Samsung Electronics Chairman Lee Jae-yong recently urged executives to adopt a 'do-or-die determination,' to which Samsung Electronics responded with the founder's management philosophy of 'talent and technology.' The company expressed its intention to return to fundamentals, restore technological leadership, and overcome the crisis facing Samsung Electronics.

Specifically, the struggling semiconductor business plans to fundamentally improve its structure by securing 'advanced technology competitiveness' and focus on enhancing the completeness of advanced (cutting-edge) processes and market responsiveness. The company also unveiled a strategy to create new product experiences through next-generation technological capabilities, including artificial intelligence (AI), across smartphones and home appliances.

Lee Jae-yong, Chairman of Samsung Electronics. Photo by Yonhap News

On the morning of the 19th, Samsung Electronics held its 56th regular shareholders' meeting at the Suwon Convention Center in Gyeonggi Province, followed by a '2025 Business Strategy Sharing and Dialogue with Shareholders' session, where it presented its business direction for this year.

The meeting, where key Samsung executives directly answered shareholders' questions, included ▲Han Jong-hee, Vice Chairman and Head of the DX Division ▲Jeon Young-hyun, Vice Chairman and Head of the DS Division ▲Han Jin-man, Head of the Foundry Business Division ▲Park Yong-in, Head of the System LSI Business Division ▲Song Jae-hyuk, CTO of the DS Division ▲Jeon Kyung-hoon, CTO of the DX Division ▲Yong Seok-woo, Head of the VD Business Division ▲Kim Woo-jun, Head of the Network Business Division ▲Noh Tae-moon, Head of the MX Business Division ▲Park Soon-chul, Chief Financial Officer (CFO), totaling 10 participants.

Struggling Semiconductor Business... Jeon Young-hyun: "Restoring Technological Leadership"

Han Jong-hee, Vice Chairman and CEO of Samsung Electronics, is attending the 56th Samsung Electronics Annual General Meeting of Shareholders held on the 19th at the Suwon Convention Center in Gyeonggi Province. Photo by Yonhap News

Samsung Electronics' response to the semiconductor business can be summarized as 'reflection and advancement.' The memory semiconductor segment lost market share to SK Hynix due to delayed response to High Bandwidth Memory (HBM), and the foundry business fell into a slump. Although Samsung succeeded in the world's first mass production of 3-nanometer (1 nm = one billionth of a meter) Gate-All-Around (GAA) process, it faced difficulties in securing yield, widening the gap with Taiwan's TSMC by nearly 60%.

Jeon Young-hyun, Vice Chairman leading Samsung's semiconductor business, pledged to improve the underperforming HBM results, stating, "We will rapidly supply the HBM3E 12-stack product to the market as early as the second quarter of this year, or at the latest, in the second half." He also plans to accelerate the transition to AI DRAM market to actively respond to customer demand and thoroughly prepare to avoid repeating last year's trial and error in the HBM4 and custom HBM markets.

In response to the low-price offensive from Chinese companies, the strategy is to focus on 'high value-added products.' Vice Chairman Jeon declared, "We will seek differentiation in high-performance, high-capacity products such as HBM, DDR5, and server SSDs," emphasizing strengthening competitiveness in advanced nodes. DDR refers to a type of DRAM with Double Data Rate technology. Chinese companies mainly focus on DDR4, which is considered low-cost, while DDR5 is regarded as a high-value product.

Shareholders also raised concerned questions about the continuing slump in the foundry business. Samsung plans to use the 3-nanometer case as a lesson, aiming to accelerate yield stabilization of the 2-nanometer process targeted for mass production in the second half of this year, and to restore 'technological leadership' through the development of next-generation 1-nanometer processes.

Han Jin-man, Head of the Foundry Business Division, explained, "We are leading the development of 3-nanometer and 2-nanometer GAA technologies," adding, "We will focus not only on process optimization but also on yield stabilization and ramp-up (improving mass production speed)."

Before the 'Dialogue with Shareholders,' Vice Chairman Jeon Young-hyun introduced this year's foundry business strategy, reaffirming the commitment to the advanced process, the core of the foundry market, stating, "We will enhance the completeness of 2-nanometer technology and develop next-generation 1-nanometer processes to establish strong technological and manufacturing capabilities in the global market."

From Smartphones to Home Appliances... Han Jong-hee: "Expanding AI Technology"

Shareholders are attending the 56th Samsung Electronics Annual General Meeting held on the 19th at the Suwon Convention Center in Gyeonggi Province. Photo by Yonhap News

Han Jong-hee, Vice Chairman and CEO of Samsung Electronics and Head of the DX (Device Experience) Division, stated, "The DX Division will pursue a future-oriented business structure transformation and bold growth," adding, "Since last year, we have been leading the market by applying AI technology to all products including smartphones, TVs, and home appliances, and we will strengthen these efforts this year as well."

The plan is to expand AI technology across all products from smartphones to home appliances and enhance device connectivity experiences based on SmartThings. Regarding security concerns arising from this, the company explained that it will ensure privacy protection through advanced security technology, Samsung Knox.

Additionally, Samsung Electronics has begun preparations to establish a leading position in the future battleground of the robotics business. It plans to build a 'development virtuous cycle system' that utilizes core technologies and data secured through manufacturing robots and kitchen robots in workplaces for the development of advanced humanoid robots, and will proceed with technology verification and advancement.

'Do-or-Die Determination' Order Answered by Samsung with "Talent and Technology"

At the regular shareholders' meeting, Vice Chairman Han Jong-hee stated, "In difficult environments, we will return to basics and focus on the company's management philosophy of 'contributing to human society by creating the best products and services based on talent and technology.'" Following Chairman Lee Jae-yong's recent call for executives to adopt a 'do-or-die determination,' this expressed the will to overcome the crisis based on the management philosophy of the late founder Lee Byung-chul.

At the meeting, all agenda items, including approval of the financial statements and appointment of outside and inside directors, were passed. The new board composition emphasized bringing in 'semiconductor experts.' This is interpreted as a response to criticism that the board had a high proportion of former economic bureaucrats and a move toward structural reform to strengthen competitiveness in the semiconductor sector.

New inside directors appointed include Jeon Young-hyun, Vice Chairman and Head of the DS Division, and Song Jae-hyuk, CTO of the DS Division and President of the Semiconductor Research Institute, both originating from 'development engineers.' As outside directors, Lee Hyuk-jae, a professor in the Department of Electrical and Computer Engineering at Seoul National University and co-director of the Semiconductor Joint Research Center, known as an AI and semiconductor expert, joined the board.