Samsung continues to be mired in a crisis situation stemming from several fronts. While the company has a global leadership position in multiple segments, maintaining the current pace could lead to losing it in the near future. Amidst the difficult times, Samsung’s CEO is urging employees to make “desperate efforts” to improve the company’s products.
Samsung’s crisis stems from its semiconductor and memory chip divisions
Samsung’s current situation stems mainly from its SoC manufacturing and high-capacity memory chip divisions. Samsung Foundry, the company’s division for SoC production, has not been up to par when it comes to producing high-performance hardware efficiently. According to reports, 3nm GAA wafers from Samsung Foundry show less than 30% yield rate, even dropping to 10% at their worst times.
The extremely low yield rate makes producing 3nm chips economically unviable for the company. This led to the cancellation of the Exynos 2500 chip for the Galaxy S25 series. Although the company was working until the last minute to try to improve the situation, the launch of the next Galaxy flagship phones is too close, so there was not much time available. Anyway, the South Korean giant still has faith that it will be able to use the Exynos 2500 in the next-gen Galaxy Z Fold and Z Flip.
Low third-party demand for Samsung Foundry, another factor
Another situation affecting Samsung Foundry is the low demand from important customers. The problems arising from the company’s wafers have pushed big players such as Qualcomm and Nvidia to move to TSMC, a direct rival.
In terms of memory chips, the company’s HBM (high-bandwidth memory) hardware performance lags behind the competition. The HBM hardware is essential for the production of AI-focused chips. In today’s tech industry, where artificial intelligence plays a fundamental role, offering the most competitive product can mark the present and future of a company. Names like AMD, AWS, Intel, and Nvidia are turning to other suppliers for components of their AI chips.
Samsung CEO urges employees to make ‘desperate efforts’ to improve products
This year, Samsung Electronics is celebrating its 55th anniversary. During an event for executives and employees, CEO Han Jong-hee called for additional efforts to improve the company’s products. “Securing technology and quality for our customers is the foundation of our competitiveness and the only way we can lead the paradigm shift. Let’s make desperate efforts to further strengthen our technology leadership, ensuring a level of quality that remains unmatched,” he said.
The executive even urged the company to explore other potential segments. More specifically, Han Jong-hee said that the company must “identify new growth engines, beyond specific products or business lines.” The recent launch of a slimmer Galaxy Z Fold Special Edition could fall in line with this.
