Continuous 'Lowest Price'... Samsung's Direct Breakthrough with 'Technology' for Future Response

Official Executive Meeting Convened After 3 Years
Sector-Specific Response Meetings Scheduled From the 21st
Stock Hits Consecutive Lows Amid Semiconductor Supply Challenges
Vice Chairman Lee Jae-yong Mentions 'Next-Generation Technology' to Seize Future Market and Overcome Crisis

[Image source=Yonhap News]

[Asia Economy Reporters Park Sun-mi, Moon Chae-seok, Cha Min-young] Samsung Electronics, which is called the ‘crisis-hit 50,000-won stock’ after its price fell below 60,000 won in the stock market, has effectively entered an emergency management system and is holding a series of response meetings. On the 20th, the first working day after Vice Chairman Lee returned from his European business trip from the 7th to the 18th, an emergency meeting of 25 executives from Samsung Electronics and its electronics affiliates was held. From the 21st, the DX (Device Experience) division, responsible for IT, mobile, and consumer electronics, will hold a first-half strategy meeting, followed by the DS (Device Solutions) division, responsible for semiconductors, from the 27th to the 29th.

◆Samsung’s successive executive response meetings= This is the first official Samsung executive meeting in three years since 2019. Although Vice Chairman Lee did not attend in person, the meeting was urgently convened right after he emphasized the supply chain crisis caused by the Russia-Ukraine war, market confusion, rapid technological changes in the industry, and the importance of advanced technologies such as semiconductors and batteries during his trip. The meeting focused intensively on sharing the executives’ recognition of the crisis and investment responses to future technologies. It is widely viewed that Samsung has recognized the crisis and has entered management aimed at developing and securing future technologies.

The meeting was chaired by Vice Chairman Han Jong-hee and President Kyung Kye-hyun, with 25 executives from Samsung’s electronics affiliates attending, including President Choi Yoon-ho of Samsung SDI, President Hwang Sung-woo of Samsung SDS, President Choi Joo-sun of Samsung Display, and President Jang Deok-hyun of Samsung Electro-Mechanics. The ‘marathon meeting’ lasted over eight hours. The executives reviewed global risk factors such as inflation, supply chain shocks, and a sharp decline in demand for IT products, which are the market environment Samsung is facing, while broadly discussing measures such as developing next-generation technologies that can lead future markets and strengthening supply chain stability. In particular, the executives devoted much time to discussions related to ‘next-generation technology development.’

The discussions of the executives will be passed on to the Samsung Electronics global strategy meetings held by each business division starting from this day. About 240 people, including headquarters executives and overseas branch heads (about 140 from DX and about 100 from DS), are expected to attend both online and offline. In the DX division, which is facing challenges such as supply chain disruptions, economic recession, and flexible operation of production lines due to the impact on sales of home appliances and mobile products, it is highly likely that difficulties and response strategies of global branches will be discussed.

Especially in the MX division, which oversees the smartphone business, the focus is expected to be on internal risk assessment and final preparations for the launch of strategic smartphones in the second half of the year. In the DS division, a core area emphasizing ‘technological capability,’ it is anticipated that they will review and forecast the changed semiconductor market in the second half of the year and check the progress of facility investments at the second foundry in Taylor, Texas, and the third plant at the Pyeongtaek campus.

◆Falling to ‘50,000-won Samsung’... Clouded future outlook= Samsung’s crisis is clearly reflected in the stock market. After falling to the 50,000-won range on the 17th, it has been hitting 52-week lows day after day. The previous day, Samsung Electronics’ stock price dropped to as low as 58,100 won during the session, and as of 10:20 a.m. on the day, it was trading around 58,400 won.

Investors diagnose that negative factors such as the delay in the launch of Intel’s next-generation server CPU, ‘Sapphire Rapids,’ have overlapped amid growing concerns about a global economic recession. Especially, since factors that could adversely affect Samsung Electronics’ business performance, such as decreased sales of set products and worsening semiconductor supply, are seen as influencing the stock price decline, expectations for the second half’s performance outlook are also low.

Neogeun Chang, head of the Research Center at Hyundai Motor Securities and a semiconductor expert, lowered Samsung Electronics’ six-month target stock price from 91,000 won to 82,500 won and this year’s operating profit forecast from 63.346 trillion won to 58.708 trillion won. He said, “The current semiconductor equipment supply shortage is severe, and it will be difficult to resolve the supply shortage even after the second quarter.”

There is also a forecast that Samsung’s foundry market share, competing with Taiwan’s TSMC, will recover only in the second half of next year. Kim Young-woo, a researcher at SK Securities, said about Samsung Electronics’ non-memory business, LSI and foundry division, “Due to the sluggish 3-nanometer GAE process, TSMC’s market share will rise until the first half of next year, and Samsung Electronics’ market share will recover only by the second half of next year.”

This content was produced with the assistance of AI translation services.