Samsung Electronics is set for a tough shareholder meeting this Wednesday at an annual general meeting (AGM) where the shareholders will confront the electronics firm over AI chip failings.
This comes as shareholders are becoming frustrated at the firm’s failure to tap into the booming AI industry. According to Reuters, the tech giant was recorded as one of the worst-performing tech stocks last year.
Samsung AGM will also focus on mitigating the US tariff impacts
Co-CEO Han Jong-Hee and the head of Samsung’s chip division Jun Young-hyun will be among the top executives who will attend the meeting that is scheduled to start at 9 am or 0000 GMT. The executives will address concerns around lagging innovation, competition in the semiconductor business as well as strategies to counter the US tariffs challenges.
The company’s shareholders are now frustrated at its failure to capitalize on the budding AI industry and the strong demand for AI services across the world.
The AGM will also look at strategies to offset the impact of the US tariffs and what will spur new growth.
According to Reuters, the tech giant has acknowledged losing its technical edge during internal meetings. The company reportedly now lags behind the likes of SK Hynix in high bandwidth memory (HBM) chips that American chip maker Nvidia and others rely on for their graphic processing units.
Chairman Jay Y. Lee reportedly criticized the company for maintaining the status quo instead of driving major innovation.
“Our technological edge has been compromised across all our businesses.”
Lee.
“It’s hard to see that efforts are being made to drive big innovation or tackle new challenges. There are only efforts to maintain a status quo rather than shaking things up,” added Lee, according to a transcript of a message to an internal executive seminar that was seen by Reuters.
Last year, shares of Samsung tumbled by almost a third while those of SK Hynix rose by 26%. Samsung has in recent years lost its market share to competitors such as TSMC in contract chip manufacturing and to Apple and Chinese rival smartphones.
Adding to its woes, Samsung issued a warning in January of depressed sales of its AI chips in the current quarter because of the US export restrictions to China, which has become its most significant market.
The geopolitical conflicts between the US and China mean Samsung faces bigger challenges than its rivals from potential US tariffs on China.
In an attempt to regain investor confidence, Samsung launched a share buyback plan worth $7.2 billion in November after its stock plunged more than four-year lows. It has recovered slightly, gaining by 7% since then. However, investors are still skeptical about its growth strategy.
The tech giant is South Korea’s most valuable company, with its market capitalization of $235 billion accounting for 16% of the total value of the country’s main bourse.
Nearly 40% of investors in South Korean stocks own Samsung shares, according to market data.
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