Samsung Faces Shareholder Backlash Over Growth Struggles, Pledges Deals

Samsung Electronics is facing increasing pressure from frustrated shareholders after failing to capitalize on the artificial intelligence (AI) boom, leading to poor stock performance and declining market dominance. At its latest shareholder meeting, investors slammed the company’s leadership for misreading market trends and allowing competitors to take the lead in key semiconductor technologies.

Samsung’s co-CEO Jun Young-hyun acknowledged that the company was late to respond to AI-driven demand for high-bandwidth memory (HBM) chips, a market now dominated by SK Hynix. He apologized for Samsung’s sinking share prices, admitting that the company had lost its technological edge across multiple sectors. The company’s stock dropped nearly one-third last year, hitting a four-year low, while SK Hynix’s shares jumped 26% due to strong AI-related chip sales.

Angry shareholders demanded a clear strategy to revive stock prices. “Last year, Samsung’s stock was so disappointing that I even considered switching to U.S. investments,” said a 65-year-old investor, Lee. In response, Samsung announced that it may expand its stock-based performance system to more employees next year, following a ₩10 trillion ($7.2 billion) share buyback plan launched in November.

To regain investor confidence, Samsung plans to pursue major mergers and acquisitions (M&A), despite challenges related to global regulations and geopolitical tensions. Co-CEO Han Jong-hee acknowledged that 2025 would be a tough year, citing economic uncertainty but pledged to deliver tangible results in acquisitions.

Samsung has also been losing ground to TSMC in contract chip manufacturing and faces increasing competition from Apple and Chinese brands in smartphones. Adding to its troubles, the company is vulnerable to U.S. restrictions on high-end chip exports to China, one of its largest markets.

Internally, Samsung executives have admitted to stagnation. A leaked message from Chairman Jay Y. Lee described a culture of complacency, stating, “There are only efforts to maintain the status quo rather than shake things up.”

Despite these struggles, Samsung is determined to make 2025 the year of recovery. The company has promised stronger R&D investments and aggressive market strategies to reclaim its competitive position.

Source: Reuters