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Samsung Electronics Co.’s chip division boss has warned employees via a memo. In the memo, obtained by Bloomberg, Jun Young-hyun expressed deep concern about the company’s potential descent into a “vicious cycle.” The memo outlines critical issues hindering the tech giant’s competitiveness.
Challenges in the AI memory market
Jun, who took the reins after Samsung lost ground to rival SK Hynix in the crucial AI memory chip market, attributed the division’s recent upturn largely to a market rebound. However, he stressed that this is not a sustainable strategy. To ensure long-term success, the Korean tech giant must overhaul its workplace culture, improve communication, and confront challenges head-on.
The Samsung chips memo reflects growing frustration over the company’s struggles in the lucrative AI chip market, dominated by Nvidia Corp. Despite the company’s recent surge in net income, Jun identified numerous obstacles threatening its future.
“We need to rebuild the culture of fierce debate that is unique to semiconductors. “If we rely on the market without restoring fundamental competitiveness, we will be stuck in a vicious cycle that will repeat last year’s situation.” Jun wrote. This call for a more open and challenging work environment underscores the urgency of the situation. The 63-year-old engineer warned that Samsung risks repeating last year’s setbacks without addressing these underlying issues.
Signs of progress amid challenges
While the memo highlights serious challenges, there are also signs of progress. Samsung has made significant strides in its comeback, including securing Nvidia’s approval for its HBM3 memory chips. The company also anticipates approval for the next-generation HBM3E chips in the coming months.
These developments mark a departure from Samsung’s historical dominance in the memory chip market as the current landscape demands a more agile and adaptive approach.
“We are currently in a difficult situation,” Jun acknowledged. However, he expressed confidence in Samsung’s ability to overcome these challenges. “With our accumulated research experience and know-how, we are confident that we will quickly regain our competitive edge.”
The Samsung chips memo by its boss is a clear call to action. Jun Young-hyun’s candid assessment and call for cultural change highlight the need for improved communication and problem-solving within the company. As Samsung works to close the gap with competitors, the focus will be on fostering a culture of openness and innovation to ensure long-term success.