“After seven years, returning to assess Samsung’s semiconductor business, I keenly felt the extremely challenging circumstances it faces compared to the past. I’ll definitely find ways to overcome these difficulties.”
Jun Young-hyun, who assumed the helm of Samsung Electronics’ semiconductor business unit, DS (Device Solutions), with a single personnel change on May 21, made this statement as his first official act after taking office, stating, “The management feels a heavy sense of responsibility.” The 64-year-old vice chairman had previously held key positions in Samsung Electronics’ semiconductor division, including head of DRAM development and president of the memory business, before moving to Samsung SDI as CEO in 2017. He has been brought in as a lifesaver after Samsung’s semiconductor division recorded an operating loss of nearly 15 trillion won last year and recently lagged behind competitors in artificial intelligence (AI) semiconductors such as high bandwidth memory (HBM).
Jun’s inauguration speech, shared internally on May 30, vividly reflects the sense of crisis facing Samsung’s semiconductor business. Unlike typical inauguration speeches that reveal future plans and aspirations, he chose straightforward expression to instill a sense of urgency in the organization. He said, “The undisputed leader in the memory business is facing fierce challenges, and the foundry business is failing to narrow the gap with leading companies,” adding, “The system LSI (non-memory) business is also facing difficulties.” Since his appointment, Jun has been immediately attending meetings and receiving reports from business unit executives without much rest. He reportedly focuses not only on diagnosing the semiconductor business itself but also on rectifying the lax organizational culture that has developed over the past few years. Industry sources say that since returning to the company, Jun was surprised to see the disappearance of Samsung’s characteristic intensity, and that executives are sweating to answer his persistent questions.
Jun faces numerous challenges ahead. Last year, Samsung’s semiconductor division recorded an unprecedented operating loss of 14.88 trillion won due to the global economic downturn and weak IT demand. In the foundry sector, Samsung has been unable to close the market share gap with the world leader, Taiwan’s TSMC, and the dominance of HBM, crucial for AI semiconductors, has been taken over by competitor SK Hynix. Jun did not hide these difficulties in his inaugural speech.
Nevertheless, he expressed his determination to reclaim the position of the top semiconductor company in the AI era. He said, “If we set the right direction and respond properly, the semiconductor business can seize new opportunities in the AI era,” expressing confidence that with the accumulated strengths, such challenges can be overcome in a short time. He added, “We will reclaim the position of the top semiconductor company.”
Since starting his role on May 21, Jun has been focused on improving business methods and organizational culture. He has diagnosed that in recent years, Samsung has become reliant on the latest equipment for production, leading to a decline in semiconductor design capabilities and a loss of urgency for cost reduction. An industry insider commented, “Bringing in expensive equipment might allow for short-term production of better products than competitors, but if this continues, profitability will decline, and the essential know-how in semiconductor design will inevitably regress. Jun believes that Samsung’s recent struggles with yield and heat issues are a result of these accumulated problems.” A DRAM expert, Jun is known for emphasizing the fundamentals of semiconductor design. As a DRAM development team leader, he famously clashed with executives over simplifying semiconductor designs to improve production efficiency, insisting, “We must not abandon the basics of design.” Upon his return, he has continued to stress the need to enhance design technology internally.
The vice chairman intends to alter the title culture to instigate tension within the organization. Since his move to Samsung SDI in 2017, Samsung Electronics has shifted employee titles to include “nim” (Korean honorific suffix added after names) or “Pro,” strictly adhering to honorifics. While the vice chairman will maintain the use of “nim” for regular employees, he plans to modify titles during management meetings to foster tension. An industry insider said, “Emphasizing communication culture sometimes results in situations where it is challenging to address mistakes,” adding, “The vice chairman aims to rectify this culture.”
