The Chairman of Samsung Lee Jae-yong, in what is seen as a ‘desperation’ move to win freedom, has finally admitted in a South Korean Court yesterday, that Samsung is in trouble and is facing a difficult time ahead with more senior management cuts coming in the next few weeks. Samsung Electronics, who recently laid off 10% of their staff locally after a shocker 2023 financial report that saw both profits and revenues fall, has acknowledged that the business is facing a grim 2025 and that Chairman Lee Jae-yong is needed to run the business. The Chairman of Samsung Lee Jae-yong, enters court in South Korea With their share price down 29% year to date, Lee who has attended close to 100 court hearings since October 2020, yesterday acknowledged in front of a South Korean Court where prosecutors want him sent back to prison, that Samsung is grappling with multiple challenges including poor earnings and technological setbacks.
In the past Samsung Australia has funded journalists to attend CES, this year there is no funding for “Any journalists” according to insiders, despite the Company looking to use the 2025 CES event in Las Vegas to launch several new TV’s and appliances. Yesterday was the first time that the Samsung chairman has publicly acknowledged that Samsung is “struggling” claim observers who were shocked at the comments. “I am well aware of the mounting concerns surrounding Samsung’s future.
Some worry it is facing a fundamental crisis and fear it might be different from the challenges we have faced before. Others offer encouragement, saying Samsung will overcome the difficulties,” Lee said, addressing the judges. As ChannelNews has reported before Samsung has a track record of being able to turn difficult situations around as they have done several times in the past.
Lee, pledged to tackle the difficulties, with management admitting that more “drastic changes” including major personnel reshuffles coming in the next few weeks. Pleading before the court Samsung’s Chairman said “I will do everything I can for Samsung to continue earning the public’s love and trust. I sincerely ask for the opportunity to fully focus on fulfilling my responsibilities.
” Facing a final hearing of a retrial on allegations including stock manipulation related to a controversial 2015 merger, Lee pledged to do everything he can for the company to overcome its current challenges. Samsung’s problems have been developing over time, in 2021 the Company delivered A$53.36 billion dollars in profits, In 2022 this fell to $A47.
5 billion, then in 2023 as Samsung Australia’s profits fell 50% the Company globally report a slump in profits to A$7.18 billion. The plunge was largely due to the poor performance of its chip division, which was severely impacted by a market downturn coupled with a major downturn in TV and appliance sales.
This year the Company faced for the first time ever conflicts involving labour unions. Lee appealed to the Court for an opportunity to lead its recovery, claiming that Samsung needed him ‘At this difficult time”. “The challenges we face today are tougher than ever, but we will persevere, overcome them and move forward,” Lee said.
Previously Lee was indicted on multiple charges including bribery and tax evasion, linked to the corruption scandal involving then South Korean President Park Geun-hye. In the latest case a lower court acquitted Lee of all of the 19 charges, this was not acceptable to prosecutors in the case, and they appealed resulting in yesterday’s court hearing. Now they are requested the same punishment of five years in prison and a fine of A$500,000 for Lee.
If this happens Samsung’s share price is tipped to fall further despite the stock climbing over 3.6% during the past five days. In the processor market where Samsung has dominated in the past Samsung has been lagging behind South Korea’s SK Hynix when it comes to high bandwidth memory (HBM) chips used in AI chipsets.
This has been a major contributor to the fall in profits claim analysts. Samsung has also lost a significant number of (HBM-related) employees to SK Hynix observers claim. Currently the Company is punting on a deal with Nvidia.
A few weeks ago, Nvidia CEO Jensen Huang Nvidia claimed his Company was working as fast it can to certify Samsung’s AI memory chips, telling Bloomberg on the sideline of an event at the Hong Kong University of Science and Technology. In late October Samsung declared progress in supplying its most advanced AI memory chips to Nvidia. Ironically, Huang did not mention Samsung when he named a number of major partners during a post-earnings call with analysts late last week in Hong Kong.
Young Hyun Jun, the head of Samsung’s chip division, wrote in a letter to customers, investors, and employees earlier this month “The leadership team at Samsung Electronics wishes to apologise for not meeting your expectations with our performance,” “We have caused concerns about our technical competitiveness, with some talking about the crisis facing Samsung. As leaders of the business, we take full responsibility for this,” said Jun, who took over the division in a management shake-up in May. One bright point is that Samsung has a healthy and highly profitable mobile phone division.
The South Korean brand is currently the world’s largest smartphone and mobile phone manufacturer. It sells over a hundred products of different varieties and models, with operational branches present in 74 countries as of this year. Samsung’s innovation is recognised with industry accolades, including 46 wins at the CES Innovation Awards 2023, 75 trophies at the iF Design Awards 2024, and 50 awards at the International Design Excellence Awards 2023.
Lee Byung-Chul founded Samsung in 1938. It started as a trading company until it gradually became an electronics manufacturer in the late 1960s. It employs about 270,372 employees, with operations in 74 countries.
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Technology
Samsung Chairman Admits To South Korean Court That Samsung ‘Is In Trouble ‘& That He Needs To Be Out Of Prison
The Chairman of Samsung Lee Jae-yong, in what is seen as a ‘desperation’ move to win freedom, has finally admitted in a South Korean Court yesterday, that Samsung is in trouble and is facing a difficult time ahead with more senior management cuts coming in the next few weeks. Samsung Electronics, who recently laid off... Read More