Jeon Young-hyun "Restoring Technological Competitiveness and Establishing Organizational Discipline... Will Fix What Needs to Be Fixed" (Comprehensive)

First-ever message on performance
'Overcoming technological inferiority' as top priority

On the 8th, immediately after Samsung Electronics announced its disappointing preliminary third-quarter earnings, Jeon Young-hyun, head of the Device Solutions (DS) division and the semiconductor business leader (Vice Chairman), issued an apology message. This is the first time the top management of Samsung Electronics has released a separate message regarding earnings. It is interpreted as a humble acceptance of the significant responsibility of its flagship semiconductor business for the poor performance and a strong expression of determination to overcome the crisis. In particular, considering the points emphasized in the message, there is a strong likelihood that the company will focus on tightening organizational discipline and strengthening technological capabilities.

Jeon Young-hyun, Head of Samsung Electronics DS Division

At the beginning of his message, Vice Chairman Jeon emphasized technology. Regarding the recent crisis theories surrounding the company, he said, "Above all, we will restore the fundamental competitiveness of our technology." This means prioritizing overcoming the technological inferiority seen in the high-bandwidth memory (HBM) market, where it has fallen behind competitor SK Hynix, and in the foundry (semiconductor contract manufacturing) sector, which has posted losses every year and failed to catch up with TSMC, leading to speculation about a spin-off.

Vice Chairman Jeon also expressed his commitment to establishing organizational discipline. He said, "We will thoroughly prepare for the future with a spirit of challenge and also revisit our organizational culture and working methods," adding, "We will fix what needs to be fixed immediately." This is a measure mindful of concerns about the internal working environment, which surfaced due to executives’ six-day workweek and labor union strikes. This year, Samsung Electronics experienced its first-ever strike by the labor union in its 55-year history, and with poor performance across business units, rumors about personnel reshuffling and voluntary retirement recommendations circulated inside and outside the company. As executives were encouraged to work six days a week, questions arose within the company about the effectiveness of this policy and its potential negative impact on the overall working environment. Vice Chairman Jeon appears to have judged that correcting the unsettled atmosphere and strengthening internal stability are essential for the company to overcome the crisis. Analysts also suggest that the unstable internal environment played a significant role in driving away investors, causing the stock price to plunge and earning the nickname “50,000 Electronics.”

Vice Chairman Jeon stated, "We will rebuild our traditional organizational culture of trust and communication," and added, "If problems are found on the ground, we will openly expose them, engage in intense discussions, and work to improve them. In particular, we will actively communicate with investors whenever possible." Finally, he appealed, "I am confident that if we challenge ourselves fiercely, the current crisis can definitely be turned into a new opportunity. I ask for your strong support and encouragement so that Samsung Electronics can once again demonstrate its strength."

Earlier, in August, Vice Chairman Jeon presented the ‘Semiconductor New Organizational Culture C.O.R.E Work’ to DS division employees. ‘C.O.R.E’ stands for Communicate to solve problems and create synergy between organizations, Openly Discuss to reach conclusions through intense debates regardless of rank or position, Reveal problems honestly, and Execute decisions thoroughly based on data. Shortly after taking office in May, he urged, "Let us create a new paradigm in the semiconductor industry by leveraging our technology, outstanding talent, and a culture of cooperation and communication."

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