Samsung Faces Challenges in Chip Sector as Leadership Changes Amid Stock Decline

Samsung recently announced new leadership for its memory and foundry chip divisions. Following the announcement, Samsung’s stock price fell by over 3%. The new appointments include Jun Young-hyun, who will serve as Samsung’s Co-CEO, overseeing the semiconductor and memory chip business. Han Jin-man has been promoted to President, leading the foundry business, and Seok-woo Nam will assume the role of Chief Technology Officer for the foundry division.

The leadership changes come at a time when Samsung’s chip division is experiencing significant performance declines. Last month, Samsung reported a 40% drop in quarterly profits for the division, attributing the decrease to delays in AI chip business with major clients. Samsung has been striving to develop its AI chip business to compete with SK Hynix in memory chips and TSMC in foundry chips. Since August, Samsung’s stock has dropped nearly 30% due to delays in AI memory chip mass production.

Samsung is currently competing with SK Hynix and Micron in the high-bandwidth memory (HBM) chip market. Major AI chip companies like NVIDIA and AMD are key customers for these chips. NVIDIA’s CEO, Jensen Huang, mentioned that the company is testing Samsung’s HBM chips and may use them in the future. HBM chips are crucial for AI applications due to their ability to handle large data volumes efficiently.

Despite challenges, Samsung remains hopeful of catching up in the HBM market. Analysts suggest that if Samsung can commence mass production of its 12-layer HBM3e chips soon, it could gain more market share by the end of 2024 and into 2025.

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