Samsung previously issued an apology because the company’s revenue guidance for Q3 2024 was below market expectations. Although it is expected to pocket around $6.77 billion this quarter, which is an increase of 274.5 percent compared to the third quarter of 2023, the Korean giant reportedly wants to be in a better position when competing with its rivals, especially during the AI boom. As part of its plan to return to the top of the food chain, Samsung is said to be introducing a major restructuring approach in its semiconductor division, where it could replace key positions in the memory, foundry and LSI Systems sectors.
The latest review was approved by Samsung Vice Chairman Jun Young-hyun; the company currently has 438 executives, nearly four times the number of its competitor, SK hynix
A recent report from The Korea Economic Daily stated that Samsung wants to change its semiconductor-related operations to be better able to compete with SK hynix. Just yesterday, we mentioned that Samsung failed to secure NVIDIA as an HBM customer, which largely impacted its revenue guidance for Q3 2024. Seeing the need for many important changes, Vice Chairman Jun Young-hyun has ordered a review to be conducted. led to significant layoffs at the presidential level.
In short, the number of executive employees is said to be decreasing in memory, foundry, and LSI Systems, which should simplify the business as they currently spend trillions of won annually. Currently, there are 438 Samsung executives working across the company’s eight divisions, while SK hynix has managed to outperform its competitors by maintaining the salaries of only 119 of them. Many of these Samsung executives were hired during the semiconductor boom of 2017 and 2018.
Analysts estimate Samsung will suffer another loss of 2.08 trillion won, or $1.564 billion, this year. However, this setback does not mean that the company will discontinue its foundry business but will take steps to ensure that the company remains competitive with its industry rivals. Currently, Samsung is struggling to increase the yield of its 3nm GAA process, so this will likely be the first hurdle in scaling.
Unfortunately, without improvements, Samsung has failed to attract new customers to use 3nm GAA technology due to unstable results, with local companies now turning to TSMC for the old manufacturing process.
News Source: Korean Economic Daily