Samsung management admitted that the company will fall into a “vicious circle” if its employees do not argue

The head of Samsung Electronics’ semiconductor unit, Jun Young Hyun, warned that South Korea’s largest company risks falling into a “vicious circle” if it does not change its corporate culture. This announcement came just months after his appointment. And amid attempts to catch up with SK Hynix in the memory segment for Nvidia computing accelerators.

Image Source: Samsung Electronics

Last year, Samsung faced serious difficulties due to a lack of internal innovation and poor communication between departments. In his short memo, Chun Yoon Hyun said that to maintain growth, the company must remove communication barriers between departments and stop glossing over problems: “We need to restore the culture of bitter disputes that is unique to the semiconductor industry. If we rely on the market without restoring fundamental competitiveness, we will be stuck in a vicious cycle that will repeat last year’s situation.”

Chun Yoon Hyun’s statement conveys disappointment over Samsung’s missteps in the memory market for Nvidia’s compute accelerators. While Samsung recently reported its fastest net profit growth since 2010, the unit’s new head has listed a host of issues that are undermining the South Korean giant’s long-term competitiveness. It’s important to note that much of this growth was driven by the overall market recovery rather than company innovation.

However, the conglomerate has begun to make progress in closing the gap with SK Hynix. Samsung has achieved a major milestone by receiving long-awaited approval from Nvidia for its high-speed HBM3 memory chips and expects approval of the next generation, HBM3E, in two to four months. This shows that the company is taking steps to improve its position in the market.

It’s unusual for South Korea’s largest company to play catch-up, as Samsung has historically been a market leader thanks to its scale and engineering prowess. However, current challenges highlight the need for not only technological, but also cultural changes within the company.

«Now we are in a difficult situation. With our accumulated research experience and know-how, we are confident that we will quickly regain our competitive advantage,” said Chun Yoon Hyun. Admitting mistakes and actively working to fix them gives Samsung a chance to regain its leading position in the semiconductor market. However, without significant changes in corporate culture, the company risks continuing to face the same problems as before.