Samsung Electronics has announced plans to pursue significant mergers and acquisitions to drive growth, following sharp criticism from shareholders over its lagging performance in the artificial intelligence boom.
The announcement was made during the company’s annual general meeting in Suwon, South Korea, where executives faced tough questions about its weak earnings and declining stock prices.
Samsung, once a leader in semiconductor innovation, has struggled in recent quarters, falling behind rivals in advanced memory chips and contract chip manufacturing—two sectors that have seen surging demand due to AI advancements. Shareholders at the meeting expressed frustration over the stock’s poor performance and demanded immediate action to revive investor confidence.
Co-CEO and head of the semiconductor division, Jun Young-hyun, acknowledged the company’s missteps, admitting that Samsung was “late in reading market trends” and missed key opportunities in the high-bandwidth memory chip sector. He apologized to investors and pledged to intensify efforts to regain a competitive edge.
In response to shareholder concerns, Samsung is considering expanding its stock-based performance system to employees next year, building on a program introduced for executives in 2024. This move aims to align employee incentives with the company’s stock performance.
Samsung shares rose 2.3% on Wednesday, outperforming the KOSPI benchmark’s 0.9% gain. The company’s stock tumbled by nearly a third last year, hitting a four-year low in November, while rival SK Hynix surged 26%.
Co-CEO Han Jong-hee warned that 2025 would be a challenging year due to economic uncertainties but assured investors that Samsung is committed to “meaningful” acquisitions to bolster growth. “There are difficulties in semiconductor M&As due to regulatory issues and national interests, but we are determined to achieve tangible results this year,” he said.
Samsung has fallen behind in key sectors, particularly semiconductors, where it trails SK Hynix in supplying HBM chips for AI applications used by companies like Nvidia. Internal meetings have acknowledged that Samsung’s technological lead has eroded across multiple business units. In a leaked internal message, Chairman Jay Y. Lee expressed concerns over stagnation, stating that the company was maintaining the status quo rather than pursuing bold innovation.
The company has also lost market share to Taiwan’s TSMC in contract chip manufacturing and faces increasing competition from Apple and Chinese smartphone brands.
Jun assured shareholders that 2025 would be “the year when we recover our fundamental competitiveness.” However, Samsung faces additional headwinds from potential U.S. restrictions on high-end chip exports to China, which has become its most significant market due to chip stockpiling by Chinese firms.
Han said Samsung would adapt to potential U.S. tariffs under President Donald Trump’s administration by leveraging its global supply chain and exploring investment options in the U.S. Meanwhile, the U.S. government is reviewing semiconductor projects that received billions in subsidies under the 2022 CHIPS Act, with Samsung among the major beneficiaries alongside Intel, TSMC, Micron, and SK Hynix.
As South Korea’s most valuable company, Samsung’s market capitalization of $235 billion accounts for 16% of the country’s stock exchange. Nearly 40% of South Korean investors hold Samsung shares, underscoring its importance in the nation’s financial markets.
The company’s ability to execute its recovery strategy will be closely watched by global investors in the coming months.
