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Korean technology giant Samsung is bleeding top memory chip talent to rival SK hynix, suggests a fresh piece from the Chosun Daily. Samsung is one of the three top memory manufacturers in the world, but the firm has fallen behind in the AI race to American rival Micron and Korea's SK hynix. The Daily interviewed former Samsung employees who left the firm because of a tight culture that dissuaded innovation and risk-taking.
Samsung's Engineering Decisions Are Viewed Through Financial Metrics, Says Expert
Within the global contract chip manufacturing industry, Samsung and TSMC are the only firms capable of manufacturing logic chips with leading-edge technologies. Among the two, TSMC is the market leader, while Samsung has struggled to compete due to poor yields. A report from the Chosun Daily hints that perhaps cultural differences between TSMC and Samsung play a role in the performance differential.
While most of the former engineers and workers interviewed by the publication worked for Samsung's memory division, one engineer who worked at the foundry, or chip-making, business described the firm's discriminating attitude towards foundry employees. "Being labeled a 'third-rate' compared to memory industry division, it was impossible to turn a blind eye to discrimination in treatment and promotion opportunities," they said. The foundry business's poor performance also led to speculation of a spin-off and eventually contributed to the engineer leaving Samsung for SK hynix.
The other former Samsung employees all worked at the memory business, and the key cultural drawback they experienced was management's failing to encourage risk-taking. "When the first question is 'Can you guarantee it'll work?' you stop getting new ideas," said one former employee as another former employee concurred and commented: "At Samsung, the first response to any new proposal is, 'Will you take responsibility if this fails?'"
Not only has Samsung's foundry business failed to effectively compete with TSMC, but the firm's memory division has also fallen behind in the AI race. The primary AI chip designer, NVIDIA Corporation, relies on memory products from Micron, while Samsung's Korean rival, SK hynix, for whom most of the firm's former employees left to work for, beat Samsung and became the world's leading DRAM supplier in March on the back of strong AI chip demand.
Another problematic factor at Samsung's memory business was a "culture of falsified reporting," which led teams to "minimize" any errors in their work or risk losing their jobs. Samsung also prefers to promote employees who work their way through the system, complained another which ends up discouraging employee diversity.
When the Daily asked a professor at Sogang University's business school about his opinion, he replied that Samsung is an organization that not only places management first but also filters engineering decisions "through financial metrics." This approach is similar to the Apple of the early 1990s, with the firm's founder, Steve Jobs, eliminating products and introducing a design-first organization to spearhead a turnaround that would eventually lead Apple to become the world's most valuable technology company. The professor warned that if Samsung's "leadership doesn’t reset the system, Samsung’s semiconductor edge could continue to erode.”
