(Bloomberg) — The leader of Samsung Electronics Co.’s chip business warned that Korea’s biggest company risked being caught in a “vicious cycle” if it didn’t overhaul its workplace culture, in an unusually harsh memo issued to employees months after taking the helm.
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Jun Young-hyun, who ascended to the role after his predecessor allowed SK Hynix Inc. to take a big lead in AI memory chips, said his division’s recent turnaround was largely based on the market recovery. To sustain this recovery, Samsung must take steps to eradicate communication barriers between departments and stop “hiding or avoiding problems,” he said in a staff memo seen by Bloomberg News.
The executive’s statement reflects frustration with Samsung’s mistakes in the new market for supplying memory chips for Nvidia Corp.’s AI accelerators. While the company this week reported the fastest pace of net profit growth since 2010, Jun listed a series of issues that erode Samsung’s long-term competitiveness.
“We need to rebuild the culture of fierce debate that is unique to semiconductors,” the 63-year-old engineer wrote in his brief memo. “If we rely on the market without restoring fundamental competitiveness, we will be trapped in a vicious cycle that will repeat last year’s situation.”
Still, the conglomerate is starting to make progress in closing the gap with SK Hynix.
Samsung has made important strides in its comeback, including winning long-awaited approval from Nvidia for a version of its high-bandwidth memory chips called HBM3, Bloomberg News reported this week. It also anticipates approval of the next generation, HBM3E, in two to four months.
It’s unusual – and humiliating – that South Korea’s biggest company is playing catch-up. Historically, Samsung has led the market, capitalizing on its scale and engineering expertise.
“We are currently in a difficult situation,” said Jun. “With our accumulated research experience and know-how, we are confident that we will quickly regain our competitive advantage.”
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