Samsung CEO warns of "do-or-die" situation, urges investment over short-term profits

Samsung's Lee urges investment focus, signaling survival stakes amid AI semiconductor woes.

: In a prerecorded seminar video, Jay Y. Lee, Samsung Electronics Executive Chairman, highlighted the company's dire situation, calling it a 'do-or-die survival issue.' He emphasized the need to prioritize long-term investment over short-term profits, especially in AI semiconductors. Facing declining market share, Lee has been under pressure due to legal issues but received a positive stock response after his speech. The warning comes as Samsung grapples with challenges in multiple sectors, including TVs, smartphones, and chip markets.

Jay Y. Lee, Executive Chairman of Samsung Electronics, delivered a critical warning regarding the company's current challenges, emphasizing that Samsung faces a 'do-or-die survival issue.' This statement was made in a prerecorded video presented at a seminar attended by about 2,000 executives from Samsung's various affiliates. Lee highlighted that the company is in crisis, urging the leadership to be ready to take difficult measures which may necessitate sacrificing short-term profits to ensure long-term survival.

The timing of Lee's address is strategic, occurring days before Samsung's annual shareholders' meeting on March 19. With declining profits and market share in its core sectors, including TVs, smartphones, and AI semiconductors, the company is under increasing pressure to present a solid plan to stabilize its business and lift its stock price. Notably, the AI semiconductor market is where Samsung is losing most ground to competitors, exacerbating its struggles.

Previously, in response to declining AI chip market share, Samsung reportedly imposed a six-day workweek on executives last year to 'inject a sense of crisis.' However, this approach did not yield the desired turnaround. Investors have grown increasingly restless, demanding clarity on Samsung's strategy moving forward. This external pressure aligns with Lee's internal push for deep reflection and action from Samsung's leadership.

Legal complications have further complicated Lee's capacity to lead Samsung effectively. He was acquitted of stock-rigging and accounting fraud charges tied to a controversial 2015 merger earlier this year. Nevertheless, ongoing legal proceedings will likely keep him entangled in litigation for the foreseeable future, possibly impacting his focus and freedom in leading strategic shifts in business direction.

Despite these challenges, Lee's call for prioritizing investment over immediate profits has had a galvanizing effect on investor sentiment; Samsung's stock experienced a more than five percent increase following his speech. Analysts, such as those cited by The Korea Herald, interpret Lee's recent moves as aimed at projecting proactive leadership while moving away from a prior passive stance.

Sources: TechSpot, The Korea Herald

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