According to a report by Yonhap News Agency on the 17th, Lee Jae-Yong, Chairman of Samsung Electronics, stated that Samsung Group is at a critical juncture of survival and urged executives to &#34;fight to the death.&#34;
The report cited sources familiar with the matter, stating that since the end of last month, Samsung Group has organized training for over 2,000 executives from subsidiaries such as Samsung Electronics, during which videos about the group's business philosophy were played, emphasizing the need for strategic transformation at Samsung Electronics.
According to the information conveyed in the video, Lee Jae-Yong indicated that Samsung Group has lost its internal driving force and is at a critical juncture of survival, urging a deep reflection starting from the top management. Lee Jae-Yong mentioned that what is important is not the current crisis situation, but the attitude towards dealing with the crisis; even if it means sacrificing immediate benefits, investments should be made for the future.
According to Yonhap News Agency, Samsung is under competitive pressure in the field of artificial intelligence chips, particularly lagging behind domestic rival SK Hynix in the high bandwidth memory (HBM) business.
<h2>Lee Jae-Yong calls on executives to &#34;live by dying&#34; and presents each participant with a &#34;message&#34; crystal plaque</h2>
According to reports, starting from the end of last month, Samsung Group held a seminar titled &#34;Reshaping Samsung's Strength&#34; for over 2,000 executives from all subsidiaries at its training institute in Yongin, Gyeonggi Province, South Korea. Samsung Group also held several seminars for executives under the theme of &#34;Restoring Samsung's Spirit and Values Education.&#34;
The video played at the seminar shared the management philosophies of the late founder Lee Byung-chul and the late former chairman Lee Kun-hee, and also featured a message from Lee Jae-Yong, although attendees reported that Lee Jae-Yong did not appear on screen in the video, only his voice was heard.
Lee Jae-Yong criticized the attending executives: &#34;Samsung is facing a life-and-death issue, and the management must deeply reflect on their actions. There must be an attitude of risking everything to survive and meet the challenges of the AI era.&#34;
Lee Jae-Yong also stated: &#34;What is important is not the crisis situation, but our attitude towards the crisis; even if it requires sacrificing immediate profits, we must invest for the future.&#34; It is reported that he also emphasized the importance of technology.
Additionally, executives attending the seminar received a crystal plaque the size of a business card, engraved with a message from Lee Jae-Yong, urging them to be &#34;strong in crisis, resilient in adversity, and tenacious in competition as Samsung people.&#34;
<h2>Chip lagging behind competitors, South Korean netizens call for Lee Jae-Yong's replacement</h2>
Earlier this year, Samsung Electronics released its Q4 2024 quarterly report, showing an operating profit of 6.5 trillion won (approximately 32.5 billion RMB), lower than analysts' average expectation of 8.96 trillion won; revenue was 75 trillion won (approximately 375 billion RMB), also below market expectations.
Currently, Samsung is facing challenges from competitor SK Hynix in the field of artificial intelligence chips, particularly in high bandwidth memory (HBM), and is in a lagging position. Its main businesses, including televisions, smartphones, and dynamic random access memory (DRAM), also saw a decline in market share last year. According to the latest business report, Samsung Electronics' global market share in televisions dropped from 30.1% in 2023 to 28.3% last year, smartphone market share fell from 19.7% to 18.3%, and its dominant position in the DRAM sector also saw a decrease in market share from 42.2% to 41.5%.
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According to analysts cited by the Korea Times, Samsung has been slow to respond in the AI era, and its traditional businesses, such as smartphones, continue to decline, with profit margins expected to be further squeezed in the future. Analysts predict that Samsung Electronics' operating profit may decline by 22.5% in the first quarter of 2025.
The head of Samsung's chip division, Choi Yong-hwan, previously admitted that the company has experienced delays in obtaining NVIDIA certification and needs to review its organizational culture and processes. The lack of NVIDIA certification has led to a reduction in Samsung's market share in high bandwidth memory (HBM). In February of this year, Choi Yong-hwan traveled to California to meet with Jensen Huang, the founder and CEO of NVIDIA.
It is noteworthy that during the ten years Lee Jae-yong has served as the actual leader of Samsung, the return on equity (ROE) of Samsung Electronics has continued to decline, even being ridiculed as a &#34;inefficient dinosaur.&#34; This represents a gradual decline in Samsung's competitiveness, leading to overseas investors selling off their shares in the company.
Especially in the current AI boom phase, unlike other competitors who are reaping substantial profits, Samsung's performance expectations have shown a downward trend. Its average return on equity (ROE) over the next 10 years is projected to be between 12.6% and 12.8%, while TSMC's figure is between 23.6% and 27.3%, widening the gap between the two companies from 4.5 percentage points in the past to 14 percentage points now.
In September last year, Samsung Electronics of South Korea formulated a layoff plan, with some overseas departments facing layoff rates as high as 30%.
On social media and popular forums in South Korea, many Korean netizens are calling for the Samsung Group to replace Lee Jae-yong with professional managers instead of continuing the family-controlled chaebol model.
Author of this article: Chen Keming, Du Hengfeng, Source: Daily Economic News, Original Title: &#34;Put to Death and Then Live! Lee Jae-yong Issues a Stern Warning: Samsung is on the 'Edge of Life and Death'&#34;
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SSNGY

Samsung Electronics Chairman Lee Jae-Yong warned that Samsung Group is at a critical moment of life and death, urging executives to "fight with their backs against the wall." He emphasized that in the face of competitive pressure in the artificial intelligence chip sector, management must deeply reflect and adjust strategies, even sacrificing short-term interests to invest in the future. Recently, Samsung Group held training for over 2,000 executives in Gyeonggi Province, reiterating the company's spirit and values. Lee Jae-Yong also presented each executive with a crystal plaque, encouraging them to demonstrate resilience in times of crisis

- Samsung Electronics Chairman Lee Jae-Yong stated that the company is at a critical juncture, urging executives to adopt a "fight or die" mentality.  
- Since late February, over 2,000 executives have undergone training emphasizing the need for strategic transformation amid increasing competition, particularly in the AI chip sector.  
- Analysts predict a continued decline in Samsung's market share and profitability, leading to calls for a change in leadership to improve competitiveness.

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"Place in a desperate situation to survive"! Lee Jae-Yong issued a stern warning: Samsung is already "on the brink of life and death."