Market watchers and investors are worried that Samsung Electronics is losing its grip on the semiconductor market. More so, Samsung is reportedly losing ground due to internal issues rather than external factors driven by the competition. Critics worry that the Korean tech giant, particularly its chipset division, has lost its ability to innovate under Lee Jae-yong’s management.
Petra Capital Management and Dalton Investments, along with Samsung investors, have raised concerns about Samsung’s corporate culture, its inflexibility under Lee’s management, and the fact that the tech giant prioritized fast growth and financial savings over innovation and a high standard of quality.
Industry experts say that chip designs are driven by “creativity and engineering prowess.” They add that “cultures at a design house and fab are critical to success. These genius engineers need the correct motivation, direction and leadership.”
Samsung seems unwilling to take the risks needed to be a true innovator
Samsung is the largest smartphone vendor in the world, but the tables can turn at any moment if Samsung doesn’t stay vigilant and on top of the mobile game. Innovation requires a certain level of risk-taking, but unfortunately, industry experts say that Samsung is now more unwilling to take risks than ever under Lee Jae-yong’s leadership.
A Samsung engineer cited by Financial Times (via NewsNCR) said: “It seems that the top decision maker is not able to grasp the root cause of the problems.” And all the while Samsung’s chipset division is struggling to keep Exynos relevant, the company’s other divisions are reportedly blaming one another “in the face of mistakes.”
In other words, it sounds like Samsung’s semiconductor division is failing due to internal conflicts or, at the least, a lack of harmony within the company’s structure. What’s worse is that these issues are becoming more problematic. Samsung is reportedly “slipping on all aspects of technology development,” including D-RAM, where the company has historically crushed its rivals.
On the bright side, Samsung recently started manufacturing chips on its 3nm technology, and market watchers believe that the company “still has a chance to draw customers in again,” assuming that it can boost the yield rate. Investors say that, for the time being, Samsung Foundry’s position is also helped by the fact that no company wants to risk relying on TSMC exclusively.
For next year’s Galaxy S23 series, reports have it that Samsung plans to use a Qualcomm-made chipset in all markets while shelving the Exynos chipset temporarily.