Samsung, the world’s leading memory chip manufacturer, issued a rare apology after saying it expected to post just $6.78 billion in operating profit for the most recent quarter, about $900 million short of analyst expectations.
“We have caused concerns about our fundamental technological competitiveness and the future of the company due to our performance falling short of the market’s expectations,” reads the statement attributed to Samsung Vice Chairman Jun Young-hyun. “Many people are talking about Samsung’s crisis. We, who are leading the business, are responsible for all of this.”
The so-called “crisis” caused the company to instigate a six-day workweek for executives earlier this year after a terrible 2023 created by an increase in competition and an overall reduction in chip demand. But the AI hype cycle was meant to reverse the company’s fortunes as demonstrated by a 15x increase in profits last quarter, with future growth driven by sales of its high-bandwidth memory chips to Nvidia.
But Samsung now says that sales of its high-end HBM3E chips to an unidentified major customer have been delayed, allowing competitors like SK Hynix to fill the void. The company is also feeling pressure from Chinese rivals for the sale of conventional chips used in devices like smartphones.
You can read the full apology as translated by Google below:
To our customers, investors, and employees who have always loved Samsung Electronics,
Today, we, the management of Samsung Electronics, would like to first apologize to you.
The performance that fell short of market expectations has raised concerns about the fundamental technological competitiveness and the future of the company. Many people are talking about Samsung’s crisis. All of this responsibility lies with us who are leading the business.
Dear customers, investors, and employees,
Samsung has a history of challenge, innovation, and overcoming that has always turned crises into opportunities. We will definitely make the serious situation we are currently facing into an opportunity for a leap forward. Our management will take the lead in overcoming the crisis. Above all, we will restore the fundamental competitiveness of technology. Technology and quality are our lifeblood. It is Samsung Electronics’ pride that we can never compromise on. Rather than short-term solutions, we will secure fundamental competitiveness.
Furthermore, I believe that only new technologies that do not exist in the world and perfect quality competitiveness are the only ways for Samsung Electronics to make a comeback.
Second, we will prepare for the future more thoroughly. We will rekindle our unique passion to fearlessly pioneer the future and to cling to our goals until the end and achieve them. We will re-arm ourselves with a challenging spirit to run toward a higher goal, rather than a defensive mindset to protect what we have.
Third, we will reexamine our organizational culture and work methods and immediately fix what needs to be fixed. We will rebuild our traditional organizational culture of trust and communication. If we find a problem in the field, we will expose it and have a heated discussion to improve it. In particular, we will actively communicate with investors whenever we have the opportunity.
Dear customers, investors and employees,
I am confident that if we challenge ourselves fiercely, we can definitely turn the current crisis into a new opportunity. I ask for your support and encouragement so that Samsung Electronics can once again demonstrate its strength.
Thank you.
Samsung Electronics DS Division Vice Chairman Jun Young-hyun
