Samsung Electronics announced on Wednesday that it is exploring major deals to drive growth, as it faces shareholder scrutiny following its inability to capitalize on the artificial intelligence boom, which contributed to its poor stock performance last year.
The South Korean giant has been struggling with weak earnings and declining share prices, particularly after falling behind competitors in advanced memory chips and contract chip manufacturing, sectors that have seen strong demand due to AI projects.
During the shareholder meeting, management came under fire for poor stock performance, with investors urging actions to revive stock prices.
Samsung’s co-CEO Han Jong-hee apologized for the company’s failure to adequately respond to the rapidly changing AI semiconductor market, acknowledging that stock performance had not met shareholder expectations. To address this, Samsung is considering expanding its stock-based performance system for executives to employees next year, as part of efforts to boost stock prices.
At the meeting, a shareholder named Lee, 65, expressed dissatisfaction with the stock’s performance, stating he even considered investing in U.S. stocks instead. Samsung’s shares dropped nearly a third last year, hitting a four-year low in November, while competitor SK Hynix’s shares rose 26%.
In response, Samsung initiated a 10 trillion-won ($7.2 billion) share buyback program in November, and shares have since increased by 7%.
Han also told investors that 2025 would be challenging due to uncertainties around economic policies in major economies but emphasized that Samsung would pursue meaningful mergers and acquisitions to drive growth. He acknowledged that semiconductor M&As face challenges due to regulatory and national interests but remains committed to producing tangible results this year.
Internally, Samsung has admitted it has fallen behind, especially in semiconductors. It is particularly behind in high-bandwidth memory chips, which are essential for AI graphic processing units used by companies like Nvidia. Chairman Jay Y. Lee expressed concerns over the lack of major innovations and efforts to tackle new challenges, urging for a shift away from maintaining the status quo.
Samsung has also lost market share to TSMC in contract chip manufacturing and to Apple and Chinese rivals in smartphones. Co-CEO Jun Young-hyun assured shareholders that 2025 would be the year Samsung recovers its competitiveness.
However, Samsung faces significant challenges from U.S. restrictions on high-end chip exports to China, which has become one of Samsung’s key markets due to chip stockpiling by Chinese firms. Han stated that Samsung would adapt its global supply chain and manufacturing operations to respond flexibly to U.S. tariffs while exploring U.S. investment options.
Samsung is South Korea’s most valuable company, with a market capitalization of $235 billion, representing 16% of the country’s main stock exchange. Nearly 40% of South Korean investors own Samsung shares.
