The first mass strike of employees in the history of Samsung Electronics did not arise out of the blue, and dissatisfaction with working conditions has been accumulating for years, as the Financial Times explains, citing comments from Samsung specialists who wished to remain anonymous. In the current circumstances, many of them are thinking about switching to competitors, among which SK hynix and TSMC are mentioned.
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Similar sentiments are transmitted to investors in those moments when they stop reacting to one-time cases of Samsung Electronics demonstrating its viability as a memory manufacturer. Samsung’s shares are up just 7.5% year-to-date, while rival and smaller SK hynix are up 65%, largely driven by interest in HBM’s memory output, where it outperforms its larger rival.
Let us remind you that Samsung is still believed to be unable to certify its HBM3E memory chips for use in Nvidia computing accelerators, which are now in great demand on the market. SK hynix is making good money from this trend; the American company Micron Technology has also become one of the suppliers of HBM3E for Nvidia’s needs, while Samsung still cannot solve its related problems.
Samsung was unable to significantly advance TSMC in the market for contract manufacturing of chips. Even if Samsung manages to get ahead of TSMC in terms of development time for one or another advanced technology, the practical aspects of chip production run into a whole range of problems that make such “leadership” useless. Customers need not only a low level of defects, but also stability of supply, and Samsung has problems with this every now and then, as informed sources note.
In May, Jun Young Hyun, who has experience in developing not only various types of memory, but also batteries, was unexpectedly appointed to the post of head of the semiconductor division of Samsung Electronics. This appointment was aimed at eliminating the “semiconductor crisis” within the company and updating the atmosphere in which the company’s employees work. The latter, according to the Financial Times, did not notice any significant changes after this appointment.
According to one of the company’s engineers, there is a gloomy atmosphere inside as Samsung lags behind SK hynix in the HBM segment and cannot catch up with TSMC in the contract manufacturing segment. Many employees believe that they are paid less than in similar positions at competitors, and therefore are thinking about moving to work for other companies. The morale of Samsung employees is also undermined by the feeling of uncertainty about the direction of the company’s further development. In the home appliances segment, sales of Samsung products are also falling, and this is depressing employees.
The week before last, Samsung formed a team to develop new generations of HBM, which brought together specialists from different departments, but Nomura International analysts believe that errors in this area will make themselves felt over the next three years. Rising memory prices in general will now provide the company with sufficient resources to develop and eliminate weaknesses in its business strategy, but it is important to make the right decisions. SemiAnalysis experts are convinced that Samsung has problems with the competence of management and corporate culture. Major changes in both areas could be painful but necessary measures to save her business.