An apology was previously issued by Samsung as the company’s earnings guidance for Q3 2024 was below market expectations. Despite being forecast to pocket around $6.77 billion for this quarter, making it a 274.5 percent increase compared to Q3 2023, the Korean giant reportedly wants to be in a better position when competing with rivals, especially during the AI boom. As part of its plan to return to the top of the food chain, Samsung is said to be introducing a massive restructuring approach in its semiconductor division, where it may replace key posts from its memory, foundry, and System LSI sectors.
The latest review was approved by Samsung Vice Chairman Jun Young-Hyun; the company currently has 438 executives, almost four times the number of its competitor, SK Hynix
The latest report by The Korea Economic Daily states that Samsung wants to revamp its semiconductor-related operations to better compete with SK Hynix. Just yesterday, we mentioned that Samsung failed to secure NVIDIA as an HBM customer, which largely affected its earnings guidance for Q3 2024. Seeing that there needs to be a bevy of notable changes, Vice Chairman Jun Young-hyun has ordered a review that will lead to significant job cuts at the presidential level.
In short, executive employee headcount is said to be reduced in the memory, foundry, and System LSI arms, which should streamline the business as it is currently bleeding trillions of won annually. At present, there are 438 Samsung executives present in eight of the company’s various divisions, whereas SK Hynix has managed to outpace its competitor by maintaining the payroll of just 119 of them. Many of these Samsung executives were hired during the semiconductor boom in 2017 and 2018.
Analysts have estimated that Samsung stands to lose another 2.08 trillion won, or $1.564 billion, this year. However, these setbacks do not mean that the firm will spin off its foundry business but will make strides to ensure that it remains competitive with industry rivals. At present, Samsung has struggled immensely with improving the yields of its 3nm GAA process, so that will likely be the first obstacle to scale.
Unfortunately, with no improvements in sight, Samsung has failed to attract new customers to its 3nm GAA technology due to unstable yields, with even local firms now shifting to TSMC for its older manufacturing processes.
News Source: The Korea Economic Daily
About the author: Omar Sohail is a reporter and analyst for Wccftech's mobile section, specializing in the technology and business of the mobile industry. His expertise lies in the intricate hardware supply chain, covering developments in semiconductor manufacturing, chip lithography, and camera sensor technology.
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